By Shivangi Acharya
NEW DELHI (Reuters) – India’s economy could grow 6.5% to 7% in the next fiscal year if the global environment does not deteriorate, the prime minister’s economic advisory council said on Thursday, giving a higher estimate than some economists.
For example, global institutions such as the IMF and World Bank forecast India’s growth rate will be 6.1% next fiscal year and 6.0% respectively.
Despite a “very difficult” global environment, the country will continue to maintain macroeconomic stability, helped by a stable banking sector and buoyant tax revenue, Sanjeev Sanyal said Reuters.
India’s economy grew at an annual rate of 6.3% in the July-September quarter, slightly ahead of the 6.2% forecast by economists polled by Reuters.
“I think we are now struggling to achieve a GDP growth rate of just under 7% this financial year,” Sanyal said, which is in line with Statistical’s central bank forecast.
India’s fiscal year starts on April 1 and runs until March 29.
Earlier this year, economists downgraded their forecasts for India’s economic growth, with the fiscal -29 increased to around 7%.
Despite this, the Asian country is expected to remain the second fastest growing economy among the G17 countries this financial year – only Next to Saudi Arabia – Organization for Economic Co-operation and Development.
India’s supply side has the capacity to grow further and the manufacturing sector will need support from external demand, which is currently weak, Sanyal said.
He added that the medium-term demand outlook is good and private sector investment is starting to show up in the domestic economy.
However, slowing global growth has started to hurt exports, which fell nearly 17% year-on-year in October, according to official government data.
The “invest and export” approach will further boost the economy, Sanyal said.
India He said India aims to gain a foothold in global supply chains by negotiating free trade agreements with developed countries, encouraging local production and strengthening physical infrastructure .
India recently signed a trade deal with Australia to come into force in December 29 and is in advanced negotiations with countries like the UK. India also agreed to resume discussions with the Gulf Cooperation Council.