India's economy is on the cusp of a cyclical recovery and will witness a 7.5 per cent growth rate in 2018, according to the Asian Economic Outlook 2018 by global investment bank Nomura, which remains bullish on India's macroeconomic outlook. It predicts a 6.7 per cent growth for India in the fourth quarter and a full-year growth of 6.2 per cent in 2017.
Nomura expects the growth in the first half next year to be 7.8 per cent, higher than the 7.1 per cent in the second half this year. It foresees a growth of 7.3 per cent in 2019 for India, according to a report in top Indian business daily.
India's gross domestic product (GDP) growth bottomed-out in the second quarter of 2017 at 5.7 per cent year-on-year, rising to 6.3 per cent in the third quarter.
The tangible benefits of structural reforms and prudent macro policies may be harder to pinpoint now, but over time will prove positive for growth, the report said. Higher crude oil prices and state election results are the primary risks.
Factors affecting growth would be the normalisation of goods and services tax- related supply disruptions, the positive effects of bank recapitalisation, a positive remonetisation impulse and a positive fiscal impulse. Small and medium enterprises are expected to ramp up production and exporters would benefit from the stronger global export upcycle.
Due to a lack of capital, public sector banks could not write off bad loans. But as these are now being written off, firms' excess leverage should decline, setting the stage for a capex revival over time, the report added. (DS)
Source: fibre2fashion.com