India Economic Forecast

India Economic Outlook

September 17, 2019

The economy looks set to regain traction in Q2 FY 2019, which runs from July to September, after GDP growth slowed to an over six-year low in Q1 FY 2020. Total rainfall over the June–September monsoon season is on track to reach close to or just above normal levels, which should support agricultural output over the coming months and, more immediately, consumer sentiment, given that approximately half of India’s workforce is dependent on the agriculture sector. Moreover, in July–August, private sector activity grew at a notably faster pace than in Q1, according to PMI data. In addition, the government announced new measures in August to try to stimulate the economy, including several mergers of public-sector banks and the relaxation of FDI rules. On a less positive note, however, vehicle sales have fallen in annual terms in recent months, and slumped in August.

India Economic Growth

The economy is projected to slow in FY 2019 as non-bank financial lenders struggle, restraining the availability of new loans to consumers and businesses. Weak public finances, tense relations with Pakistan and a slowing global economy will also weigh on the outlook. More positively, a close-to-normal monsoon season and lower interest rates are seen supporting growth. Our panelists expect GDP growth of 6.5% in FY 2019, which is down 0.3 percentage points from last month’s estimate, and 6.9% in FY 2020.

India Economy Data

20132014201520162017
Population (million)1,2501,2661,2831,3001,317
GDP per capita (USD)1,4881,6141,6331,7632,017
GDP (USD bn)1,8592,0442,0962,2912,657
Economic Growth (GDP, annual variation in %)6.47.48.08.27.2
Consumption (annual variation in %)7.36.47.98.27.4
Investment (annual variation in %)1.62.66.58.39.3
Industrial Production (annual variation in %)3.34.13.34.64.4
Public Debt (% of GDP)68.567.869.969.069.8
Money (annual variation in %)12.310.711.56.721.8
Inflation Rate (CPI, annual variation in %, eop)8.25.34.83.94.3
Inflation Rate (CPI, annual variation in %)10.06.04.94.53.6
Inflation (PPI, annual variation in %)5.21.3-3.61.82.9
Policy Interest Rate (%)8.007.506.756.256.00
Stock Market (annual variation in %)18.924.9-9.416.911.3
Exchange Rate (vs USD)60.0262.2966.2564.8665.11
Exchange Rate (vs USD, aop)60.4261.1465.4267.0464.46
Current Account (% of GDP)-1.8-1.4-1.1-0.7-1.8
Current Account Balance (USD bn)-32.8-27.6-22.1-15.2-48.7
Trade Balance (USD billion)-136.7-137.5-117.3-108.9-158.6
Exports (USD billion)314311262275305
Imports (USD billion)451448379384463
Exports (annual variation in %)4.6-1.2-15.65.110.6
Imports (annual variation in %)-8.0-0.7-15.31.320.5
International Reserves (USD)304341356373421
External Debt (% of GDP)24.023.223.120.619.9

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India Facts

ValueChangeDate
Bond Yield6.55-0.04 %Sep 04
Exchange Rate71.99-0.09 %Sep 04
Stock Market36,725-0.08 %Sep 04

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