Agriculture, private consumption recovery may push India’s growth to 7.8% this fiscal: Credit Suisse

Indian economy is expected to witness a growth of 7.8% in the current fiscal on account of likely recovery in agriculture and private consumption, says a Credit Suisse report.

According to Swiss financial major, while the first six months of 2016-17 would see growth consolidating at current levels, the improvement in economy is likely to take place in the second half of the year.

“We expect growth to improve to 7.8% year-on-year this fiscal from 7.5% last year,” Credit Suisse said in the report.
“This recovery is likely to be gradual with agriculture and private consumption leading the way but corporate investment and exports remaining lacklustre,” it said.

At the same time, the report also estimates GDP growth for January-March quarter of 2015-16 to accelerate to 7.5% from 7.3% in the previous quarter.

The official GDP growth figures for the fourth quarter ending March 31, 2016 would be announced on later in the day.

Credit Suisse noted that consumption could stage a “sharper recovery in second half of the current fiscal with a fuller impact of monsoons on rural consumption which has been a drag, and implementation of pay commission”.

Further, observing weak domestic private investments on account of plunge in non-oil, non-gold imports, the report said that the imports are expected to recover marginally over the year as growth improves gradually.

On trading in equities, the report estimated that the macro environment should be conducive for equity markets going forward.

“Historically we found that the environment of improving growth and manageable inflation is supportive of equity markets,” the report said.