Forecasts for India's economic growth show a mild slowdown in the coming fiscal years, according to the latest Reuters poll of economists. GDP Growth Projections: India's economy, the third-largest in Asia, grew at a rapid pace of 8.2% in the previous fiscal year, outpacing other major economies. However, the forecast indicates a decline to 7.0% in the current fiscal year, followed by a further dip to 6.7% in the next fiscal year. Despite the ruling BJP's loss of parliamentary majority in recent elections, economists expect no significant shift in government policy aimed at boosting GDP growth through capital spending. Challenges Ahead: With weak private expenditure and a lack of major growth-enhancing reforms anticipated, concerns remain over job creation and wage levels, particularly among the youth. The projected growth rates for the economy reflect a cautious optimism among economists, with expectations of a modest pickup in private capex but no substantial shift in consumption patterns. Government Initiatives: The government is likely to maintain fiscal consolidation measures while utilizing excess funds, such as a significant dividend transfer from the RBI, for increased spending in key areas. Plans to lower personal tax rates and focus on infrastructure development in the upcoming budget may provide a much-needed boost to consumption and employment. Inflation and Monetary Policy: Inflation is expected to hover around the RBI's target of 4%, with no significant decrease anticipated in the near future. However, the RBI is likely to cut interest rates once this year, potentially in the last quarter. Overall, the economic outlook for India reflects a cautious approach to growth amid changing political landscapes and global economic uncertainties.
(For other stories from the Reuters global economic poll: Reuters.com/economicpolls)
(Reporting by Vivek Mishra; Polling by Veronica Khongwir, Devayani Sathyan, Susobhan Sarkar and Anant Chandak; Editing by Hari Kishan, Ross Finley)