Macroeconomic Forecast India

July 2005 | Macroeconomic Forecasts

India's economy during the year to March 31 2006 (2005/06) will expand by 6.8%, according to BMI forecasts, more or less unchanged from last year's growth of 6.9%. Services, the economy's biggest sector, will fuel growth this year, expanding by 9.3% and contributing 4.9 percentage points to the economy's expansion. Industry is heading for another year of strong growth, albeit weaker than in 2004/05, when the sector expanded by 7.7%, the best performance for a decade. There was, however, little sign of a slowdown in April, when industrial production rose at an annual rate of 8.8%. Output of capital goods, a bellwether of future investment, rose by a double-digit 24.5% y-o-y, the fastest rate for a year. Consumer goods were up by 13.1%, basic goods by 5.9% and intermediate goods by 2.3%. The late arrival of this year's monsoon is looking less likely to affect the outlook for agriculture. Rainfall between June 1 and July 6 was only 2% below the seasonal average boosting the likelihood of strong agricultural growth

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