Latest GDP Figures Indicate a Brighter Outlook for Indian Economy
After stellar GDP growth in the Q4 of the 2017-2018 fiscal year, is the Indian economy finally back on track?
The earlier slowdown in the economy, attributed to the negative effects of the back-to-back structural reforms of demonetisation and implementation of GST, seems to have subsided, as the economy bounced back with strong growth in the final quarter of the 2017-2018 fiscal year at 7.7%, the strongest growth rate in two years.
While the overall yearly growth was at 6.7%, somewhat significantly weaker than the previous financial year, each quarter experienced stronger-than-previous growth, showing an upward trend as the economy recovers. Luckily, there are few signs that this will slow down, suggesting that the Indian economy is now out the rut created by demonetisation and GST.
However, there are still lingering and persistent concerns regarding jobs creation, as 1 million people join the workforce every month, as well as distress in the financial sector over the ratio of bad loans. There is also the question of rising fuel prices, and as a major oil importer, this would likely have some negative effect on growth.
Overall, the strong bounce-back in growth does suggest that pundits were correct in predicting only a temporary economic slowdown and that with GST now in place, the economy is likely only get stronger and stronger.