India’s GDP set to grow by more than 7 per cent next year as economy improves
India’s economic growth is set to improve further, with GDP growth rising to 7.1 per cent in the next fiscal year ahead of 6.5 per cent this year, helped by a multitude of factors including robust consumption demand and low commodity prices, according to a new report from the India Ratings & Research agency today.
The agency, which is part of the Fitch Group, said there will be a gradual pick up in growth momentum also owing to structural reforms, with the goods and service tax (GST) and the insolvency and bankruptcy code (IBC) in place.
The forecasts, though still bullish, came in slightly lower than the 7.4 per cent growth estimated by the Asian Development Bank and International Monetary Fund.
Amidst improving economic sentiment, Commerce and Industries Minister Suresh Prabhu said Wednesday: “India is going to be a $5 trillion economy in 8-9 years. $1 trillion will come from manufacturing.” Prabhu said he is working on a strategy for international trade which will contribute $2 trillion to the economy which could come from both manufacturing and services.
Indian shares also hit new highs today, as optimism in global markets spread to the subcontinent. Banking stocks including HDFC Bank, ICICI Bank and State Bank of India jumped higher at the open, after reports emerged which said the government was considering raising the foreign investment ceiling in private banks to 100 per cent and in public lenders to 49 per cent, on top of the fact the government decided to trim additional market borrowing by 60 per cent for the ongoing fiscal year ending in March.
The NIFTY50 index swiftly rose by over 90 points at the open, but since fell back to 10,800 at the close, still putting it on track for more monthly gains. The index has been one of Asia’s best performers this year.
Related: An Indian growth story
Bank stocks moved sharply higher in Thursday’s trade on Indian equity markets
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