| Date: |
24-02-2015 |
| Subject: |
Rupee to be on firmer footing post Budget 2015? You can bet on history |
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NEW DELHI: The Indian economy has bottomed out and it is expected to grow at about 7.5-7.8 per cent in next fiscal beginning April 2015, DBS Group Research said today.
"Implications of this revised set of data (on GDP and inflation) on other economic aspects are ascertained. Nonetheless, lead indicators affirm that the economy has bottomed out and is bound to improve from here on.
"GDP growth in 2015/16 could be in the range of 7.5-7.8 per cent, lifted by a firm manufacturing sector and robust domestic demand," the Singapore-based research firm said.
It said interpretation of new set of data by Reserve Bank and Finance Ministry will be watched closely, specially for monetary policy and fiscal policy guidance.
India recently rebased and revised its Gross Domestic Product (GDP) growth numbers. Apart from a change in base year, the revised methodology includes private corporate performance as well as sales and service taxes, which have lifted growth for industrial and service sectors.
On inflation, the researcher said there is a room for rate cuts as prices have been falling.
"Given the prospect of sub 6 per cent CPI (Consumer Price Index) inflation in 2015-16..., there is room to cut another 50 basis points by June quarter."
RBI in a surprise move in January, slashed the policy rate by 0.25 per cent to 7.75 per cent after having maintained a hawkish monetary stance for over one-and-half year.
However, RBI is still to factor in the revised growth estimates, which might alter the policy stance, it added.
Speaking with reporters at a conference here on the performance of NDA-led government so far, DBS Bank India Managing Director and Head of Treasury & Markets Vijayan Subramani said, "Upto now they have done everything positive in terms of governance. I would view it as positive. I don't think there are too many choices."
On Union Budget 2015-16 to be unveiled on Saturday, he said it can be a sensible budget without expecting too many histrionics.
Source : economictimes.indiatimes.com
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