India expects up to 7.2% growth in upbeat outlook
With these projections, its growth is on track to outpace that of other major economies, despite tensions with the US
[MUMBAI] India’s government has predicted the economy will expand by as much as 7.2 per cent in the coming financial year, offering an optimistic outlook at a time of heightened uncertainty for global trade.
The South Asian economy is projected to grow by 6.8 to 7.2 per cent in the fiscal year starting in April, said the Economic Survey released by the Ministry of Finance on Thursday (Jan 29), offering a more bullish outlook than market consensus.
For the current financial year, the government estimated the economy will expand by 7.4 per cent, driven by consumption and investment.
“The cumulative impact of policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7 per cent,” the government said in the survey, which is an annual report card on the economy.
“The outlook, therefore, is one of steady growth amid global uncertainty – requiring caution, but not pessimism.”
With these projections, India’s growth is set to outpace that of other major economies, despite tensions with the US.
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India remains one of the few large economies yet to sign a trade deal with Washington, DC, and is still saddled with US tariffs of 50 per cent, hurting key labour-intensive sectors.
Indian Prime Minister Narendra Modi is seeking to offset the impact by boosting domestic demand and concluding trade agreements with other major partners, including the European Union.
Still, economists said those efforts may not fully make up for losses tied to the lack of a trade deal with the US.
The International Monetary Fund forecast 6.2 per cent growth in the coming financial year, if steep tariffs remain in place.
The Indian government is more optimistic, with the survey saying “ongoing trade negotiations with the US are expected to conclude during the year, which could help reduce uncertainty on the external front”. BLOOMBERG
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