India's average GDP growth may rise to 7.8% in H1: Nomura

30 Apr '18

2 min read

The average gross domestic product (GDP) growth in India is expected to rise to 7.8 per cent in the first half of this year and the economy is likely to witness a cyclical recovery driven by investments as well as consumption despite worsening net exports, according to Japanese financial services company Nomura. The recovery started in the second half of 2017.

Nomura expects average GDP growth to rise to 7.8 per cent year-on-year in the first half 2018 from 7.2 per cent in October-December 2017, a news agency reported quoting a company research note.

Growth will start to moderate in the second half of this year towards 6.90 per cent due to rising oil prices, tighter financial conditions and a likely slowdown in investment activity ahead of the national elections, the company forecast said.

On the Reserve Bank of India’s monetary policy stance, which expects economic growth rate to strengthen to 7.4 per cent in the current fiscal, Nomura said rising oil prices are changing the macro dynamics and may put pressure on inflation. For every $10/bbl rise in oil prices, consumer price index inflation may rise by 30-40 bps and worsen the current account balance by 0.4 percentage points. (DS)

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