Published: Mon, June 04, 2018
Worldwide | By Stella Potter

GDP Growth Projection for Asia, 2018

GDP Growth Projection for Asia, 2018

The significant expansion in GDP print has sprung a positive surprise by notching up an impressive growth of 7.7 per cent in the fourth quarter of 2017-18 and "marginally overshoots the advance estimates of GDP released earlier this year", said CII Director General Chandrajit Banerjee.

India's GDP growth rate of 7.7 percent, recorded in the fourth quarter of 2017-2018, shows that the country's economy was on an uptrend, said president of Federation of Indian Chambers of Commerce and Industry (FICCI) Rashesh Shah on Friday. India's GDP grew at the fastest pace in seven quarters at 7.7 per cent in January-March. The uptick in economic activity benefitted from the healthy rabi harvest, robust volume growth in various sectors, an improvement in corporate earnings, as well as a favourable base effect related to the low growth in Q4 FY2017, said Aditi Nayar, Principal Economist, ICRA.

"What is most noticeable is the increase in the growth rate of GVA (Gross Value Added - which includes taxes but excludes subsidies) of manufacturing sector in the last two quarters of 2017-18 at 8.5 per cent and 9.1 per cent at constant price". There have been various quarters and years when the oil prices have gone up but there has been growth also.

The minister also hailed and credited Prime Minister Narendra Modi and Finance Minister Arun Jaitley for the development. It may be noted that economists had pegged the figure at 7.3 % but as stated earlier, rapid growth in Agriculture, manufacturing and construction sector contributed significantly to the latest figures. His government launched a nationwide goods and services tax (GST) but its introduction was botched, almost scuttling India's growth prospects in the near term.

Investment saw a growth of 14.4 percent year-on-year in the quarter, thanks to a step-up in public infrastructure spending. "We should however be wary of the headwinds the economy faces in the coming quarters from higher crude prices feeding into inflation and rising inflation expectations". GVA growth for Q4 FY18 also picked up to 7.6%YoY, helped by manufacturing and construction sectors growth.

Experts believe that GDP growth in 2018-19 could get a boost from prospects of good monsoon which will further boost the agriculutural produce and farm output. In terms of annual growth, GVA was at 6.5 percent.

"A sustained rise in oil prices to $100 a barrel could even lead to a re-emergence of some of the external and currency risks that existed pre-2014", said Priyanka Kishore, head of India and South East Asia economics at Oxford Economics Ltd.

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