The Reserve Bank of India (RBI) has forecasted the Indian economic growth to fall below 5 percent in 2013-14 as the prospects of a pick-up in real GDP growth in the second half of 2013-14 have been dampened by negative growth witnessed in industrial production over two consecutive months. In the previous fiscal, India's economic growth slowed down to a decade low of 5 percent owing to the global slowdown as well as domestic factors such as high inflation and interest rates.
The RBI in its latest Macroeconomic and Monetary Developments report, highlighted that consumption demand would continue to weaken and lackluster capital goods production indicated stalled investment demand. However, giving some respite, it asserted that growth is likely to recover to 5.5 percent in the next financial year and added that there could also be a case of gradual recovery to the 5-6 percent band on the back of fast track implementation of infrastructure projects cleared by the Cabinet Committee on Investments (CCI), global growth recovery and easing inflation.
Referring to country’s external sector, the report said the current account deficit, which widened to all time high of 4.8 percent of GDP in FY13, will ease to 2.5 percent this fiscal. On the exchange rate front, the RBI expects the rupee to be at the 61 levels by December 2014. However, the central bank expressed concerns over the coming general elections adding that new government’s commitment to reforms hold the key for the future stability of the market and the rupee.
The RBI in its latest Macroeconomic and Monetary Developments report, highlighted that consumption demand would continue to weaken and lackluster capital goods production indicated stalled investment demand. However, giving some respite, it asserted that growth is likely to recover to 5.5 percent in the next financial year and added that there could also be a case of gradual recovery to the 5-6 percent band on the back of fast track implementation of infrastructure projects cleared by the Cabinet Committee on Investments (CCI), global growth recovery and easing inflation.
Referring to country’s external sector, the report said the current account deficit, which widened to all time high of 4.8 percent of GDP in FY13, will ease to 2.5 percent this fiscal. On the exchange rate front, the RBI expects the rupee to be at the 61 levels by December 2014. However, the central bank expressed concerns over the coming general elections adding that new government’s commitment to reforms hold the key for the future stability of the market and the rupee.
No comments:
Post a Comment