India’s real GDP growth likely to rise to near 8 pct y/y in 2018, says Scotiabank

Indian economic growth is likely to outperform other global major economies. The economic momentum is likely to be stimulated by domestic demand, which is responding to supportive policymaking and structural reforms, noted Scotiabank in a research report.

In the meantime, the nation is less reliant on external demand as compared to most of its peers. This goes well for the nation’s outlook in the midst of weak global trade. The real GDP growth of India is expected to accelerate close to 8 percent year-on-year in 2018 from 7.6 percent year-on-year in 2016-2017, added Scotiabank.

Policymakers of India continue to be strongly committed to improving the ease of doing business in the country. There has been progress in this scenario; for instance, the upper house of parliament approved a constitutional amendment that permits a nationwide Goods and Services Tax to be rolled out. This tax reform would transform the Indian economy into a single market and improve India’s business environment.

“In response to recent reform successes, we anticipate a pick-up in private sector investment in the latter half of the forecast horizon once implementation progresses”, stated Scotiabank.

The Indian government’s fiscal stance continues to be quite prudent even if the public outlays by Prime Minister Modi’s administration continue to underpin the economic activity and rebound rail, road and energy infrastructure. Thus, the central bank monetary policy is expected to stay accommodative for a longer period of time as it has a huge responsibility of giving a boost to the economy, according to Scotiabank.