India's economy predicted to grow 6.9% this fiscal year: Reuters Poll
Prime Minister Narendra Modi's government spending in recent years has gone into building infrastructure. Private investment and job creation have lagged, suggesting New Delhi will continue to play an outsized role in India's economic growth. The Jan.
10-23 Reuters poll of 54 economists predicted the economy will grow 6.9% this fiscal year, a small upgrade from 6.7% in a December poll. It was then forecast to expand 6.3% next fiscal year, the same as in the previous poll. While inflation rose to the fastest pace in four months in December to 5.69%, driven by pressures from food prices, economists expect that to fade soon.
"We expect inflation to subside quite drastically in the short run, catching up to the downside with already-subdued core inflation," said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics. "At the same time, though, these trends also reflect an enduring sluggishness taking hold in the economy, particularly with regards to private consumption, the most important aspect of growth." The survey showed consumer price inflation averaging 5.4% and 4.7% this fiscal year and next, with a majority of economists, 23 of 32, of the view the risk of a significant resurgence over the coming six months was low. Consumer spending, which makes up 60% of Asia's third-largest economy, has slowed.
But a strong majority of economists, 25 of 28, said employment will improve in the next six months. Still, with job growth not matching the overall economic growth rate or the pace of millions of young people joining the workforce every year, the dip in consumption will likely take a toll. "While the Indian economy is on a strong momentum...there are signs of a moderation on account of a weakness in private
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