Economic activity to expand 7.3% in 2017-18: RBI

Economic activity as measured by Gross Value Added (GVA) is expected to expand by 7.3 per cent in the current fiscal, up from 6.6 per cent in 2016-17, the Reserve Bank said noting the risks are evenly balanced.

The headline inflation, it said, is expected to be in the range of 2-3.5 per cent in the first half of 2017-18 and 3.5-4.5 per cent in the later part. Global growth is gaining traction in 2017-18 with the recovery, driven primarily by a cyclical upturn in investment, manufacturing and trade, the RBI said in annual report for 2016-17. Favourable domestic conditions are mainly expected to enable a quicker pace of overall economic activity during the year, it said.
While growth is again expected to be consumption-led, continuing remonetisation should enable a pick-up in discretionary consumer spending, especially in cash-intensive segments of the economy, the central bank said.

The report said that expected normal monsoon and the resultant replenishment of reservoirs, policy initiatives of the government such as hike in MSPs and increasing crop insurance coverage are likely to help in boosting crop production and supporting rural demand. “On the whole, real GVA (Gross Value Added) growth is projected to rise from 6.6 per …read more