The Indian economy may reach a 7 per cent growth in 2018 with government policies tilting towards the stress-ridden rural landscape in the penultimate year before the Lok Sabha elections, the ASSOCHAM Year-Ahead Outlook (AYAO) pointed out.
Against GDP growth of 6.3% in the second quarter of 2017-18, the economic expansion may reach the crucial 7 per cent mark by the end of September 2018 quarter , according to the AYAO forecast, while inflation may range between 4-5.5 per cent towards the second half of the next calendar year with the Monsoon being a key imponderable.
“Our projections for 7 per cent GDP growth are based on the assumption of stability in the government policies, good Monsoon, pick-up in industrial activity and credit growth as also stability in the foreign exchange rates. The worries on account of crude oil shooting up are likely to abate, if there are no fresh geo-political shockers,” said ASSOCHAM President Sandeep Jajodia.
While the underlying bullish sentiment should continue to prevail in the Indian stock market in 2018, the returns on equity may not be as robust as in 2017. “This is because the 2017 bull run has already factored in the return of growth steadiness in 2018 and the corporate earnings witnessing a pick -up.”
Weak base of corporate earnings in sync with the lowering of GDP growth in later part of 2017 would also help the revival in the year ahead. “Things have certainly and surely bottomed out. There does not seem to be any fresh bottom; only an uptick,” the AYAO noted. The AYAO is based on a feedback from intensive brainstorming done by several ASSOCHAM sectoral National Councils and its top policy organ, the Managing Committee.
The coming budget is expected to be heavily tilted towards the farmers while the industrial focus would be on sectors which create jobs. “A realisation seems to be dawning that growth per se is not enough, the benefits must be seen in the form of higher employment. The year 2018 would see policies in this direction”.