Rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the India’s gross domestic product (GDP) is likely to grow by 7.4 percent year-on-year in FY18. This is on the upper end of the 6.75 to 7.5 percent band estimated in the Economic Survey. The rating agency however revised down GDP growth forecast for FY17 to 6.8 percent from 7.9 percent estimated earlier. This downgrade is even lower than Central Statistical Organisation's advanced estimate of 7.1 percent.
Ind-Ra has said that the gross value added (GVA) of the three production sectors including agriculture, industry and services would grow at 3 percent, 6.1 percent and 9.1 percent year-on-year respectively in 2017-18, backed by consumption demand and government spending. However, private final consumption expenditure is expected to grow at 8.9 percent, the government final consumption expenditure is expected to clock 9 percent growth in the next financial year. For current account deficit it said that it is likely to come at 1 percent of GDP in FY18 as against 0.9 percent in FY17. It also said that this will help the rupee trade at an average $69.18 in FY18.
Talking about the global scenario, the report said that imports will get hit because of rising protectionism, adding that US President Donald Trump’s trade agenda and the current direction of European politics, both have the potential to ‘create a global economic and market turmoil’ in 2017. As against the popular perception, Ind-Ra said the main setback to investment growth came from the negative 2.2 percent growth in the gross fixed capital formation (GFCF) of household sector. It expects GFCF to grow at 4.9 percent in 2017-18.