Macroeconomic Forecast India

May 2008 | Macroeconomic Forecasts

BMI View: For faster expansion, the economy needs a much more benign monetary policy environment than it currently has, and in the end this boils down to resolving the core problem of weak infrastructure. Without a major overhaul in the country's infrastructure development programme - which can now only be feasibly introduced by the next government - authorities will be forced to choose between keeping a lid on prices and higher GDP growth rates. Recent remarks from officials suggest that the former objective will take precedence in 2008. For now, we see real GDP growth slowing from an estimated 9.0% in FY2007/08 to 7.9% in FY2008/09.

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