India's Pace Of Growth To Accelerate In 2018-19: RBI Governor To IMF Committee

| April 22 , 2018 , 08:51 IST

Reserve Bank of India (RBI) Governor Urjit Patel addressing the International Monetary Finance Committee in Washington on Saturday predicted that the Indian economy is expected to accelerate next fiscal after a resilient performance in 2017-18.

"The Indian economy turned in a resilient performance in 2017-18," Patel said.

"Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained," he said.

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"India has persevered with structural reforms over a wide area ranging from a flexible inflation targeting framework for monetary policy; liberalisation of FDI flows; a unique identification (Aadhaar) backed direct benefit transfers; an insolvency and bankruptcy code; the GST; realty reforms; and a swathe of measures for improvement in the ease of doing business more generally," said Patel.

According to the RBI governor, while the real GDP growth was moderated to 6.6 percent from 7.1 percent a year ago, there was a strong rebound in the second half of the year after a turnaround in investment demand.

This was further supported by an acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest, Patel added.

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Since global demand has been improving, exports and fresh investments would be boosted, Patel said, adding that the overall real GDP growth was expected to expand to 7.4 percent in 2018-19 with risks evenly balanced.

In the address, Patel specified that since November 2016, headline consumer price inflation had generally remained below the medium-term target of 4 percent.

In the IMF January update of the 'World Economic Outlook: Brighter Prospects, Optimistic Markets, Challenges Ahead' released in Davos and Washington, IMF forecast a 7.4 percent growth of India in FY19, as compared to the 6.7 percent growth this year. In FY20 the growth of India is expected to rise further to 7.8 percent.