RBI Governor Urjit Patel Says Economy Could Grow At 7.4% This Fiscal, Subject To Crude Price Risk

India’s economy could grow at 7.4 percent in the fiscal year to March 2019 after a “resilient performance” in the second half of the previous year, Reserve Bank of India (RBI) Governor Urjit Patel said. The economy likely grew at 6.6 percent in the 2017/18 fiscal year against 7.1 percent a year earlier, but higher investments led to a significant pick in the second half, Patel said in his address to the International Monetary and Financial Committee in Washington.

Higher government spending, manufacturing and services helped India regain its status as the world’s fastest growing major economy in the October-December quarter, surpassing China for the first time in a year.

India, that happens to be Asia’s third-largest economy, grew 7.2 percent in the December quarter, its fastest in five quarters. The strong performance is likely to continue.

Several factors are expected to accelerate the pace of growth in 2018/19, a government statement said, quoting Patel.

“There are now clearer signs that the revival in investment activity will be sustained. Global demand has been improving, which should encourage exports and boost fresh investments. On the whole, real GDP (gross domestic product) growth is expected to expand at 7.4 percent in 2018/19, with risks evenly balanced,” he said.

Since November 2016, consumer price inflation (CPI) has generally remained below a medium-term target of 4 percent, Patel said.

India’s annual retail inflation eased for a third straight month in March to 4.28 percent, driven by smaller rises in food prices.