Indian economy coming out of Demonetization and GST shock: IndRa
What's the story
Indian economy is gradually coming out of the twin shock of demonetization and GST which temporarily derailed growth, India Ratings said. The agency cautioned on the possible widening of the current account deficit (CAD) due to rising oil prices which was creating pressure on the currency. "Our research has shown that major macro parameters are showing signs of recovery," said chief economist Devendra Pant.
Information
Areas of concern are rising bond yields
The parameters showing signs of recovery are manufacturing, capital goods production, non-food credit, and consumption said the economist. On the monetary side, areas of concern are rising bond yields which indicate potential slippages on the fiscal front, Pant said.
Reforms
Govt unlikely to get big bang reforms before 2019 polls
Pant said it was unlikely that the government would go ahead with big bang reforms due to the 2019 Lok Sabha elections. If the CAD remained within 3%, then it would not be alarming for the economy provided capital inflows were in excess of outflows caused by high oil import bill. "In that case, the rupee will have an appreciating bias," he said.
Quote
Growth in current fiscal is expected to be 7.4%
"Things are improving now. If things behave as they are now and the policy remains conducive, growth in current fiscal is expected to be 7.4%", Pant said.