India Economic Forecast

India Economic Outlook

November 14, 2017

The economy is coming to terms with the disruptions caused by demonetization a year ago and the implementation of the Goods and Services Tax (GST) earlier this fiscal year. Consumption-related indicators have strengthened in recent months, while industrial output tracked higher in Q3 from the previous quarter. Nonetheless, GDP growth remains hampered by weak capital expenditure growth and a distressed banking sector. In a positive step, on 24 October the government unveiled a two-pillar stimulus package that encompasses a recapitalization plan for public sector banks worth USD 32.5 billion and a five-year USD 107 billion infrastructure investment program. In addition, authorities announced in early November a series of measures to lower the GST tax incidence on consumers as well as to reduce the compliance burden for firms.

India Economic Growth

Despite a tepid start to the fiscal year in April, economic growth is set to accelerate throughout FY 2017 as the economy recovers from demonetization- and GST-induced shocks. Economic momentum could be further bolstered by the new fiscal package, which will accelerate the resolution process of banks’ stressed assets, shore up loan growth and boost corporate sentiment. The economy is seen growing 6.7% in FY 2017, unchanged from last month’s estimate. In FY 2018, FocusEconomics 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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