Indian economy likely to expand at strong pace in years ahead, to grow 7.1 pct in FY 2019 – Wells Fargo

The Indian economic growth strengthened in the third quarter of this year following a year or so of economic slowdown. According to a Wells Fargo research report, the Indian economic growth is expected to pick up from 6.7 percent in the fiscal year that will end in March 2018 (FY 2018) to 7.1 percent in FY 2019 to 7.3 in FY 2020. The Indian GDP growth might surpass the projections in the next few years; however, the nation might not be able to achieve double-digit economic growth rates on a sustained basis, at least in the near future, stated Wells Fargo.

The robust growth in India’s working age population is the positive point of the economy that might continue in the next few decades. On the downside is the nation’s relatively small industrial sector. If India had a larger industrial sector, the economy might be able to realize considerable productivity acceleration and stronger economic growth; however, poor infrastructure and comparatively low rates of capital investment hold back growth in the industrial sector, and thus, the nation’s potential economic growth rate, said Wells Fargo.

“We believe that the Indian economy will continue to grow at a solid rate in coming years. But for us to get really bullish on Indian growth prospects, we would need to see evidence of a sustained rise in the country’s savings and investment rates”, added Wells Fargo.

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