New Delhi, Sep 4: Global brokerage firm UBS has lowered India’s GDP growth forecast from 7.2 per cent to 6.6 per cent for this fiscal earlier.
The brokerage said that the growth is expected to pick up in coming quarters as the economy normalises post implementation of the GST.
Notwithstanding the downward revision in growth forecast, the global financial services major said the structural growth story of the country remains intact thanks to the ongoing reform push by policymakers and and consumption demand.
“We are revising down our forecasts for India’s GDP growth to 6.6 per cent year-on-year and 7.4 per cent year-on- year in 2017-18 and 2018-19, respectively (as against our earlier estimates of 7.2 per cent and 7.7 per cent),” said Tanvee Gupta Jain, an economist with UBS.
According to data, due to demonetisation India’s economic growth slipped to a three-year low of 5.7 per cent in April-June and amid a slowdown in manufacturing activities.
The report said reforms like implementation of GST, a new bankruptcy code, liberalisation of FDI, measures to curb black money and encouraging digitisation would help in improving the productivity dynamics of the country.
“We believe India needs continuous policy reforms to stay on a sustainable growth path. Any increase in populist spending in the run-up to the 2019 general elections would likely support consumption but delay the investment cycle recovery, thus lowering the potential growth outlook, in our view,” Jain added.
She further said that though the implementation of GST has resulted in temporary disruption in economic growth momentum.