Domestic demand likely to drive Indian economic growth in 2017-2018, says Scotiabank

Outlook of the Indian economy is improving as the economy rebounds from the brief shortage of cash following the Indian government’s currency exchange initiative in November 2016. According to a Scotiabank research report, the real GDP growth of India is likely to average 7.75 percent year-on-year in 2017-2018 after a 7.5 percent rise in 2016.

Domestic demand, especially household spending, is expected to drive momentum on the back of the country’s swiftly expanding middle class and increasing disposable incomes and improvements to the business environment after the implementation of important reforms.

Meanwhile, the nation’s macroeconomic stability is rebounding, indicating contained inflation, enhanced fiscal position and reduced external vulnerabilities. Furthermore, India’s political environment is expected to assist the economy’s prospects.

“Expectations for smoother passage of key structural reforms will enhance investor confidence and appetite toward India over the coming quarters”, added Scotiabank.