Some of the key factors including strengthening investments, particularly FDI, and sustained growth in consumer spending, bolstered by moderate inflation and favorable demographics will propel Indian economic growth
The Dollar Business Bureau
Betting big on India’s economic growth prospects, Paris-based think-tank Organisation for Economic Cooperation and Development (OECD) on Thursday revised India’s GDP growth rate to 7.4% for the financial year 2016-17 from its last year’s projected 7.3%.
“India will continue to grow robustly, by 7.4% in 2016 and 7.3% in 2017,” OECD said in its Interim Outlook Report released Thursday.
Meanwhile, referring to a faltering Chinese economy, the global research body said with China shifting its economy from manufacturing-driven to services-driven, its economic growth is expected to contract further to 6.5% in 2016 and 6.2% in 2017.
Brazil’s economy growth, which is currently battling deep recession, high inflation, large budget-deficit, political crisis and recently-emerged Zeeka virus, has been expected to shrink to 4% this year.
The think-tank attributed the dipping global growth rate to a weak trade and investment, sluggish global demand, low inflation, and insufficient wage and economic growth. It underscored that the global economic growth in the year 2016 isn’t going to be much different than what it was in 2015.
“Global growth prospects have practically flat-lined, recent data have disappointed and indicators point to slower growth in major economies, despite the boost from low oil prices and low interest rates,” said Catherine L. Mann, Chief Economist, OECD.
Mann said that the government should focus on restructuring policies that could provide short-term benefits and contribute to long-term global growth.
“Given the significant downside risks posed by financial sector volatility and emerging market debt, a stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies, to strengthen growth and reduce financial risks,” Mann said.
In what could significantly please Prime Minister Narendra Modi, who is busy luring foreign investors during the ongoing Make in India campaign, currently being held in Mumbai, credit rating agency Moody’s forecasted the country’s GDP to grow at about 7.5% during 2016 and 2017.
“In the five years to the end of the decade, we expect GDP per capita (at market exchange rates) to increase by 34% in real terms in India, compared with only 3.6% in the G20 emerging markets excluding China and India,” Moody’s said in its Global Macro Outlook report released on Thursday.
The research body highlighted some of the key reasons including strengthening investments, particularly FDI, and sustained growth in consumer spending, bolstered by moderate inflation and favorable demographics to propel the Indian economic growth in the coming years.
Moody’s expects GDP per capita to increase by 34% in real terms in India, compared with only 3.6% in the G20 emerging markets excluding China and India
February 19, 2016 | 03:00pm IST