India GDP to Slow Down Marginally

India GDP to Slow Down Marginally, But Remain Strong at 7.5% in 2019 & 2020

India’s economic growth will slow somewhat, but it will remain strong, close to 7.50% in 2019 and 2020, the Organization for Economic Cooperation and Development (OECD) said. India’s gross domestic product (GDP) grew 6.7% in 2017-18. The OECD projects that GDP at market prices will grow 7.3% in 2019 and 7.4% in 2020 from 7.5% in 2018.

GDP to Slow Down

Economic growth will slow down a bit, but it will remain solid, close of 7.5% in 2019 and 2020.  for India in its economic outlook 2018. Stricter financial conditions, higher oil prices, adverse terms of trade, lower growth in partner countries and growing political uncertainties in India and abroad will tend to reduce growth, he said
The Reserve Bank of India expects AF19 growth of 7.4%.

The global credit rating agency Moody’s Investors Service projected that India’s economic growth will moderate to 7.3% in 2019 and 2020, as higher oil prices combined with the depreciation of the rupee and the monetary adjustment will curb domestic demand.

Although higher oil prices and the rupee depreciation put pressure on demand, inflation, the current account and public finances, and structural reforms will help business investment and exports.

These reforms include the new Insolvency and Bankruptcy Code, a more fluid implementation of the Goods and Services Tax (GST), better roads and electricity and bank recapitalization. The pressures on inflation are also increasing due to recent increases in salaries and housing subsidies for public employees. The Reserve Bank’s credibility to target inflation and its projected marginal increases in policy rates will help anchor inflation. Containing the relatively high ratio of public debt to GDP would require controlling contingent liabilities, such as those coming from public companies and banks, he said.

The organization also sought greater subsidy reform to help make social spending more effective and improve the governance of public banks. On the trade front, he noted that the increase in US tariffs on Chinese imports could benefit India’s exports, particularly in the textile sector.

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