Fitch’s reading of India’s economic outlook, and its projection of 7.7 per cent growth in 2017-18 and 2018-19, against 7.1 per cent last year, is an affirmation of India’s positive economic growth. Even though Fitch retained India’s sovereign ratings at BBB- with a stable outlook, it expressed confidence that the business environment is likely to gradually improve with the implementation and continued broadening of the government’s structural reform agenda.
Business Line reports that Fitch lauded the measures such as the Insolvency Code, relaxation in the foreign direct investment regime and the soon-to-be rolled-out GST. It also said that efforts to rein in inflation are now bearing fruit and India is also less vulnerable to trade shocks due to its more domestically based economy and strong external finances.
The Nikkei India Manufacturing Purchasing Managers’ Index stood at 52.5 in April, the same level as in March. The rate of growth of new orders was at a six-month high in April and output increased in each of the three monitored sectors, led by consumer goods.
“Buoyant domestic demand coupled with sustained growth of new orders from abroad boosted the upturn in total new business… in April,” said Pollyanna De Lima, economist at IHS Markit and author of the report.
De Lima said the outlook appeared encouraging, with output expected to remain on an upward trajectory amid reports of planned capacity expansions, new product launches, aggressive marketing campaigns and an improving economic scenario.
