India's GDP growth to slow modestly this fiscal year and next: Reuters poll
slowdown in India's fast-growing economy held steady in the first Reuters poll of economists since the ruling Bharatiya Janata Party (BJP) lost its parliamentary majority in phased national elections that ended in early June.
Asia's third-largest economy grew 8.2% in the last fiscal year, the fastest among major economies. But growth is set to slow to 7.0% and then 6.7% in the current and next fiscal years, according to a June 19-27 Reuters poll of over 50 economists.
The forecasts are broadly unchanged from those made before the outcome of an election Prime Minister Narendra Modi was widely expected to win easily. Instead, the BJP lost its sizeable parliamentary majority for its historic third term.
Forming a government with the support of regional parties, the BJP retained most ministers, suggesting no imminent shift in policy, which for years has aimed to boost gross domestic product (GDP) growth through government capital spending.
But without a follow-through in private expenditure, many Indians — particularly young people — have been left out of work or in low-paying jobs. With no major change to policy expected yet, economists left their forecasts steady.
«With a reduced majority now, I don't expect any major growth-enhancing reforms whatsoever over the next five years,» said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics.
«The reality is (that) consumption is weak. It's just going to surface more in the GDP numbers because the lift from statistical discrepancies is fading.»
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