India Economic Forecast

India Economic Outlook

September 18, 2018

GDP accelerated at the fastest pace in over two years in the first quarter of FY 2018, which ran from April to June, buoyed by surging private consumption. Meanwhile, although growth rates in government consumption and fixed investment remained high, they fell from the previous quarter. The external sector dragged slightly on headline economic growth in Q1 but significantly less than in the previous quarter due to a stronger expansion in exports. Going forward, the economic picture looks mixed. On the plus side, business activity in the private sector increased in both July and August, although the pace of expansion in August slowed significantly from July’s 21-month high. However, as questions accumulated over the government’s ability to meet its fiscal targets and the rupee continued to weaken, the 10-year government bond yield hit a four-year high in August.

India Economic Growth

In FY 2018, which runs from April 2018 to March 2019, economic growth should accelerate thanks to fading disruptions from the demonetization of November 2016 and the launch of a goods and services tax in July 2017. However, risks of fiscal slippage in the run-up to next year’s general elections, increasing global trade tensions and higher oil prices cloud the outlook. Our panel expects GDP growth of 7.4% in FY 2018, which is up 0.1 percentage points from last month’s estimate, and 7.5% in FY 2019.

India Economy Data

20132014201520162017
Population (million)1,2501,2661,2831,3001,317
GDP per capita (USD)1,4881,6141,6321,7501,979
GDP (USD bn)1,8592,0442,0942,2752,607
Economic Growth (GDP, annual variation in %)6.47.48.27.1-  
Consumption (annual variation in %)7.36.47.47.3-  
Investment (annual variation in %)1.62.65.210.1-  
Industrial Production (annual variation in %)3.34.13.44.54.3
Public Debt (% of GDP)68.567.869.668.970.2
Money (annual variation in %)12.310.711.56.321.9
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)-1.8-1.4-1.1-0.7-1.9
Current Account Balance (USD bn)-32.8-27.6-22.1-15.2-48.7
Trade Balance (USD billion)-136.6-137.5-117.2-109.0-157.0
Exports (USD billion)314311262275303
Imports (USD billion)451448379384460
Exports (annual variation in %)4.6-1.2-15.65.110.0
Imports (annual variation in %)-8.0-0.6-15.41.319.7
International Reserves (USD)304341356373421
External Debt (% of GDP)24.023.223.220.7-  

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India Facts

ValueChangeDate
Bond Yield7.87-0.04 %Oct 16
Exchange Rate73.47-0.09 %Oct 16
Stock Market35,162-0.08 %Oct 16

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