India Ratings and Research (Ind-Ra) has revised down its economic growth forecast for fiscal 2018-19 to 7.2 per cent from the earlier 7.4 per cent. The key reason is the headwinds emanating from the elevated global crude oil prices and the government decision to fix the minimum support prices of all kharif crops at 1.5 times the production cost.
Ind-Ra believes the other headwinds lurking on the horizon are the rising trade protectionism, the depreciating rupee and no visible signs of the abatement of the non-performing assets of the banking sector, according to a press release from the company.
The organisation expects the annual value of exports to touch $345 billion in 2018-19, crossing the peak of $318 billion attained in 2013-14. India will continue to face headwinds on the exports front, it says.
At a disaggregated level, Ind-Ra expects private final consumption expenditure to grow 7.6 per cent in 2018-19 compared to 6.6 percent in the last fiscal. The thrust for growth is coming from the waning impact of demonetisation, rise in rural consumption due to two consecutive favourable monsoons and reduction in the goods and services tax rate on several items.
However, investment expenditure as measured by gross fixed capital formation is unlikely to significantly improve over 2017-18 figures and is expected to grow at 8 per cent, it adds. (DS)
Fibre2Fashion News Desk – India