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17
January 2019
 |
GDP
(The Total Investment & Insurance Solutions)
The country's economy is likely to grow a tad
higher at 7.5 per cent in 2019-20 on account of steady improvement in major
sectors -- industry and services, said India Ratings and Research (Ind-Ra)
Thursday.
According to the advance estimates of the
Central Statistics Office (CSO), the economy may clock a growth rate of 7.2 per
cent in the current financial year, up from 6.7 per cent in the previous year.
Ind-Ra, a Fitch Group company, expects gross domestic product (GDP) growth to
be a "tad higher" at 7.5 per cent in fiscal 2019-20.
After
demonetisation and the GST implementation, the agency had expected 2018-19 to
be a year of quick recovery and, indeed, the recovery has been sharp with GDP
growth coming in at 7.2 per cent, it said.
It
further said GDP growth would have been even better but for the global
headwinds caused by an abrupt rise in crude oil prices and strengthening of the
US dollar, among other factors. "However, GDP growth in 2019-20 will be
more dispersed and evenly balanced across sectors as well as demand-side growth
drivers," Ind-Ra said.The Total
Investment & Insurance Solutions
Over the past few years, private final
consumption expenditure and government final consumption expenditure have been
the primary growth drivers of Indian economic growth.
Ind-Ra said it believes that investments are
slowly but steadily gaining traction, with gross fixed capital formation
growing 12.2 per cent in the current fiscal and projected to clock 10.3 per
cent in the next year.
"This is certainly a comforting
development, but the flip side of this development is that it is primarily
driven by the government capex (capital expenditure), as incremental private
corporate capex has yet to revive" it said. It further said that due to
the slowdown in private corporate and household capex, GDP growth has failed to
accelerate and sustain itself close to or in excess of 8 per cent
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