GDP growth may propel to 7.3 per cent in FY20

For the Indian economy, fiscal 2019 was a year of recovery from demonetisation and disruptions caused by GST. GDP growth is expected to accelerate to 7.3 per cent in 2019-20, said top rating agency Crisil.

GDP growth is expected to accelerate to 7.2 per cent in 2018-19 and further to 7.3 per cent in 2019-20, according to top rating agency Crisil. The report predicts retail inflation to rise substantially to 4.5 per cent in 2019-20.

Fiscal 2019 was a year of recovery from demonetisation and the initial disruption caused by the Goods and Service Tax implementation, the unorganised sector was severely affected by the above two reforms. The economy has so far done well mainly on account of public investment and is estimated to grow at 7.2 per cent, although private consumption has disappointed. Exports, however, have performed well, helping the manufacturing sector.

In the financial year 2019-20, the GDP growth is expected to move up marginally to 7.3 per cent based on the assumptions of normal rains, lower oil prices and a stable political outcome in the 2019 general elections.

Private consumption growth is expected to accelerate on the back of softer interest rates and an improvement in farm realisations as food inflation moves up. For fiscal 2020, sustaining the momentum in overall investments will be a tough task without support from private investments, the report said. With continuously improving capacity utilisation and the end of the de-leveraging phase for corporates, conditions are ideal for private corporate investments. However, the report does not mention any downside risk including volatile oil prices and political stability.