India Economic Forecast

India Economic Outlook

September 21, 2021

GDP growth hit a record high in the second quarter (FY Q1 2021), predominately driven by a low base effect. Domestic demand surged on the back of stronger private consumption and fixed investment growth, but public spending declined, capping the overall gain. On the external side, soaring imports outpaced growth in exports, and consequently the external sector dragged heavily on the overall reading. Turning to Q3 (FY Q2 2021), economic momentum has likely eased—partly due to the fading impact of the low base effect and elevated uncertainty surrounding the pandemic. Nevertheless, the composite PMI expanded for the first time since March in August, while growth in merchandise exports and imports remained strong, suggesting some resilience in activity midway through the quarter. On the vaccine front, only 57.8 doses had been administered per 100 people of the total population by 19 September.

India Economic Growth

The economy should expand robustly in FY 2021 (April 2021–March 2022) as domestic activity recovers. In FY 2022, growth should ease slightly but remain upbeat, supported by healthy private spending and fixed investment growth. Uncertainty around the virus and weak fiscal metrics pose risks to the outlook. FocusEconomics panelists project GDP to expand 8.9% in FY 2021, and increase 7.4% in FY 2022, which is up 0.3 percentage points from the previous month’s forecast.

India Economy Data

2015 2016 2017 2018 2019
Population (million)1,2831,3001,3171,3341,352
GDP per capita (USD)1,6331,7662,0182,0232,113
GDP (USD bn)2,0962,2952,6572,6992,857
Economic Growth (GDP, annual variation in %)8.08.37.06.1-  
Consumption (annual variation in %)7.98.17.07.2-  
Investment (annual variation in %)6.58.57.29.8-  
Industrial Production (annual variation in %)3.34.64.43.8-1.2
Public Debt (% of GDP)68.868.769.469.471.9
Money (annual variation in %)11.56.721.814.310.3
Inflation Rate (CPI, annual variation in %, eop)4.83.94.32.95.9
Inflation Rate (CPI, annual variation in %)4.94.53.63.44.8
Inflation (PPI, annual variation in %)-3.61.82.94.31.7
Policy Interest Rate (%)6.756.256.006.254.40
Stock Market (annual variation in %)-9.416.911.317.3-23.8
Exchange Rate (vs USD)66.2564.8665.1169.1975.34
Exchange Rate (vs USD, aop)65.4267.0464.4669.9170.91
Current Account (% of GDP)-1.1-0.7-1.8-2.1-  
Current Account Balance (USD bn)-22.1-15.2-48.7-57.0-  
Trade Balance (USD billion)-117.3-108.9-158.6-182.3-153.5
Exports (USD billion)262275305331314
Imports (USD billion)379384463513467
Exports (annual variation in %)-15.65.110.68.5-5.1
Imports (annual variation in %)-15.31.320.510.7-8.9
International Reserves (USD)356373421414476
External Debt (% of GDP)23.120.519.920.1-  

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India Facts

Value Change Date
Bond Yield6.50-0.04 %Jan 01
Exchange Rate71.23-0.09 %Jan 01

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