Macroeconomic Forecast India

August 2005 | Macroeconomic Forecasts

India's economy will strengthen during the year to March 31 2006 (2005/06) and we have revised up our forecast for real GDP growth to 7.9% from 6.8%. At its July 26 policy review, the Reserve Bank of India, the central bank, left its reverse repo rate on hold at 5.00% following quarter-point rises in October 2004 and April 2005. Low borrowing costs are fuelling bank credit to the private sector, which expanded by 25.3% during the first quarter of the year, up from 17.7% a year earlier. Services, the economy's biggest sector, will expand by 9.9% in 2005/06, industry by 7.0%, and agriculture by 4.1%. The economy will slow slightly during 2006/07, when we expect real GDP to grow by 7.3%

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