Private consumption will grow 6.3 percent in FY18,
over a high base of an 8.7 percent growth in FY17, and will remain the
biggest contributor to GDP at 55.7 per cent, the report said.
Attributing the continuing slowdown to the impacts of the
demonetisation, GST implementation and weakness in agriculture, rating
agency Crisil has maintained its FY19 growth estimate at 7.6 percent on
the low base.
"The pace of economic growth has slowed down this
fiscal year, which is attributable mostly to the lingering impact of the
demonetisation, transitory disruptions caused by the implementation of
the goods and services tax (GST), and weak agricultural growth," it said
in a note today.
The note comes days after the Central
Statistical Office came out with its advanced estimates of growth for
FY18 suggesting a slowdown in GDP expansion to 6.5 per cent, the lowest
in four years.
The agency, however, held on to its FY19 growth estimate of 7.6 percent primarily on the low base of FY18.
"Given
the low base and the expected waning of the GST impacts going ahead, we
retain our forecast of 7.6 percent real GDP growth in fiscal 2019, with
private consumption leading the recovery," it said.
Private
consumption will grow 6.3 percent in FY18, over a high base of an 8.7
percent growth in FY17, and will remain the biggest contributor to GDP
at 55.7 per cent, the report said.
In FY19 as well, growth will
continue to be consumption-led as inflation will under control and
interest rates are expected to be soft, it said, adding a rise in
government employees’ salaries with the implementation of the seventh
pay panel recommendations will also help.
The rural focused-government spending will also be of help, it added.
The
Rs 2.11-trillion recapitalisation programme will ensure that the
state-run banks are well positioned to support the growth, it said.
Support
to growth will also come from the external sector where the global
recovery should help exports, which had faced some headwinds after the
GST implementation, it said.
10 Jan 2018, 10:19 AM