Even as the factor output for the month ended March slowed down by a tad, a report by Nomura is highly optimistic on India's GDP growth for the quarter ended March 2018. But as the GDP outlook for the first two months of FY18 remained subdued, the overall GDP figure for the entire year is estimated at 6.6%. While for the March quarter, the report expects a 2-year high GDP rate at 7.7%. It is to be noted that, due to twin jolts to the Indian economy by way of demonetisation in November 2016 and later GST introduction in July 2017, the year 2017-18 started with a grim GST rate of 5.7%.
The full-year GDP growth forecast by CSO advance estimates for FY18 at 6.6% will be the lowest since Narendra Modi came to power in the year 2014.
Beginning the year on a grim note with a GDP of just 5.7%, Narendra Modi government faced severe criticism but later as the GDP recovered to 7% level, a bounce back in growth trajectory was suggested. In FY17, the economic activity grew at a slow rate of 7.1%.
RBI in a recent move expressed its concerns over India's growth and held the view that Central Statistics Office usually understates Indian economy growth.
A cyclical recovery is on the offing as the Nomura foresees increase in both consumption and investments. But at the same time, some negatives currently all pervasive in the Indian economy include the likes of weak rupee dollar valuation, widening trade deficit and current account deficit due to rising crude oil prices.
As per World Bank estimates for the current year and the year 2019, GDP is pegged at 7.3% and 7.5% respectively. The CSO will come up with the quarter ended March 2018 GDP on May 31, 2018.