Crisil retains 7.6% growth estimate for FY19 on lower base

Mumbai, Jan 8 (PTI) Attributing the continuingslowdown to the impacts of the demonetisation, GSTimplementation and weakness in agriculture, rating agencyCrisil has maintained its FY19 growth estimate at 7.6 per centon the low base."The pace of economic growth has slowed down thisfiscal year, which is attributable mostly to the lingeringimpact of the demonetisation, transitory disruptions caused bythe implementation of the goods and services tax (GST), andweak agricultural growth," it said in a note today.The note comes days after the Central StatisticalOffice came out with its advanced estimates of growth for FY18suggesting a slowdown in GDP expansion to 6.5 per cent, thelowest in four years.The agency, however, held on to its FY19 growthestimate of 7.6 per cent primarily on the low base of FY18."Given the low base and the expected waning of the GSTimpacts going ahead, we retain our forecast of 7.6 per centreal GDP growth in fiscal 2019, with private consumptionleading the recovery," it said.Private consumption will grow 6.3 per cent in FY18,over a high base of an 8.7 per cent growth in FY17, and willremain the biggest contributor to GDP at 55.7 per cent, thereport said.In FY19 as well, growth will continue to beconsumption-led as inflation will under control and interestrates are expected to be soft, it said, adding a rise ingovernment employees' salaries with the implementation of theseventh pay panel recommendations will also help.The rural focused-government spending will also be ofhelp, it added.The Rs 2.11-trillion recapitalisation programme willensure that the state-run banks are well positioned to supportthe growth, it said.Support to growth will also come from the external sector where the global recovery should help exports, which had faced some headwinds after the GST implementation, it said.

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