ZCZC
BCN-18
INDIA-ECONOMY-GROWTH
India’s annual growth slows to 6.7%, Q4 picks up
MUMBAI, June 1, 2018 (BSS/AFP) – India’s growth expanded to 7.7 percent in
the fourth quarter of the financial year, official data showed Thursday, as
Asia’s third-largest economy continues to recover from the fallout of several
disruptive economic initiatives.
Figures from the Central Statistics Office showed GDP growth improved from
the last quarter, which expanded at 7.2 percent, reinforcing India’s status
as one of the world’s fastest growing economies.
The result exceeded the expectations of a survey of economists by
Bloomberg, who predicted India’s growth for January to March 2018 at 7.4
percent.
The data showed a slide in full-year expansion, however, to 6.7 percent for
the fiscal year ended March 31, compared with 7.1 percent in the last
corresponding period.
Analysts said the healthy Q4 figures showed that the economy had recovered
from a slump, which followed a shock decision to scrap 86 percent of currency
notes in late 2016 and the introduction of a new nationwide tax last year.
“The after-effects of both GST (goods and services tax) and demonetisation
seem to be fading off. We can expect the GDP figures to stay above 7 percent
for the next few quarters,” Ashutosh Datar, senior economist at Mumbai-based
IIFL, told AFP.
India’s quarterly growth slowed to as low as 5.7 percent in spring last
year as the economy reeled from the cash ban and readied itself for GST,
which aimed to create a single market in India.
The economy has been slowly getting back on its feet however, recording
quarterly growth of 6.5 percent for the three months to September 2017 before
the Q3 figures of 7.2 percent in February.
– Oil prices –
Healthy growth in the farming, manufacturing and construction sectors
combined with a boost in consumer spending to fuel the expansion in Q4
growth, Thursday’s statistics showed.
MORE/HR/1000
ZCZC
BCN-19
INDIA-ECONOMY-GROWTH 2 LAST MUMBAI
However, rising oil prices, a weakening rupee, and billions of dollars of
debt in the form of bad bank loans means the Indian economy will face
headwinds in the near future, analysts warned.
“The Indian economy will face challenges in the form of non-performing
assets and bad loans in the banking sector.
“Global oil prices will affect inflation and thereby challenge the central
bank to hike interest rates,” said Datar, referring to next month’s monetary
policy meeting of the Reserve Bank of India.
India imports nearly 80 percent of its oil and fluctuations in crude oil
prices seriously affect the Indian economy.
Prices of petrol and diesel have surged to record highs in India as the
international crude oil prices hit $80 per barrel, pressuring the rupee and
dubbing it Asia’s worst performing currency.
Moody’s ratings agency on Wednesday cut its growth forecast to 7.3 percent
from 7.5 percent for fiscal year 2018-19, owing to the surging cost of crude.
Goldman Sachs reduced its growth projection for the year ending March 2019
to 7.6 percent from 8 percent, citing the mountain of bad loans crippling
India’s state-owned lenders.
BSS/AFP/HR/1002