India Economic Forecast

India Economic Outlook

December 18, 2017

Recent data suggests that India’s economic recovery is gradually taking hold following a lackluster performance in Q1 FY 2017. The economy grew at a faster 6.3% in year-on-year terms in Q2 FY 2017—which runs from July to September—with the effects of demonetization and the implementation of the Goods and Services Tax (GST) gradually dissipating. Although the fourth quarter got off to a weaker start, with seasonal effects dragging on economic activity in October, stronger data for November, including auto sales and the manufacturing PMI, suggests that the economy remains on a recovery path. Meanwhile, Moody’s upgraded the country’s sovereign issuer ratings to Baa2 from Baa3 in mid-November. The ratings agency expects the government’s reform agenda to unleash India’s growth potential and help drive down the government debt burden over the medium term, thus warranting a higher credit rating.

India Economic Growth

Growth is expected to accelerate further as recent fine-tuning measures on GST compliance, a large recapitalization plan for public banks and easing policy uncertainty all bolster the economy’s performance. The economy is expected to grow 6.6% in FY 2017, down 0.1 percentage points from last month’s estimate. This month’s downward revision largely reflects a slightly weaker-than-expected GDP figure in Q2 FY 2017. In FY 2018, panelists forecast growth of 7.4%.

India Economy Data

20122013201420152016
Population (million)1,2431,2591,2761,2921,309
GDP per capita (USD)1,4651,4771,5971,6111,729
GDP (USD bn)1,8211,8602,0382,0822,264
Economic Growth (GDP, annual variation in %)5.56.57.28.07.1
Consumption (annual variation in %)5.37.46.86.18.7
Investment (annual variation in %)4.81.84.16.62.4
Industrial Production (annual variation in %)1.1-0.12.83.45.0
Public Debt (% of GDP)69.168.568.669.669.5
Money (annual variation in %)7.512.310.711.56.3
Inflation Rate (CPI, annual variation in %, eop)10.58.25.34.83.9
Inflation Rate (CPI, annual variation in %)10.210.05.94.94.5
Inflation (PPI, annual variation in %)7.46.02.0-3.61.8
Policy Interest Rate (%)7.508.007.506.756.25
Stock Market (annual variation in %)8.218.924.9-9.416.9
Exchange Rate (vs USD)54.2860.0262.2966.2564.86
Exchange Rate (vs USD, aop)54.3760.4261.1465.4267.04
Current Account (% of GDP)-4.8-1.8-1.4-1.1-0.7
Current Account Balance (USD bn)-87.4-32.8-27.6-22.1-15.2
Trade Balance (USD billion)-189.5-136.6-137.5-117.8-105.7
Exports (USD billion)300314311262275
Imports (USD billion)490451448380380
Exports (annual variation in %)-1.94.6-1.2-15.74.9
Imports (annual variation in %)0.1-8.0-0.6-15.30.2
International Reserves (USD)293304341356373
External Debt (% of GDP)22.524.023.323.3-  

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India Facts

ValueChangeDate
Bond Yield7.03-0.04 %Oct 18
Exchange Rate64.53-0.09 %Dec 06
Stock Market32,597-0.08 %Oct 18

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