According to BMI Research, a Fitch group company, India is expected to register a growth of 6.9% in this financial year.
BMI Research was founded in 1984 by Business Monitor International and later in 2014, it was acquired by Fitch Group. The firm performs industry and financial market analysis in 24 industries and 200 global markets.
The report has observed that the Real GDP growth has slowed to 6.1 % year-on-year in the fourth quarter of 2016-17. The growth rate is expected to pick up following the demonetisation drive in November 2016 but the weak public banks are expected to cap the economic recovery. The Public-Sector Banks are still plagued with mounting non-performing assets, which is expected to take a toll on India’s growth potential. Though the RBI has taken efforts to clean up the NPAs, the study observes that it will take some more time for credit allocation to the productive sectors of the economy.
The report, however, expects the economy to continue to recover in the coming quarters as the negative ramifications of the demonetisation measure have already started wearing off. India is also expected to get benefits from positive demographic trends, greater external stability arising out of improved terms of trade from low oil prices, and continued reforms improving the business environment of the country.
The report expects a slowdown in economic growth in North Asia in 2017 and 2018. The slowdown will be driven by the structural slowdown in China, poor policy initiatives in Japan, and policy uncertainty in South Korea.
In Asia, India and ASEAN are likely to remain as the bright spots in the region owing to their positive demographics and improvements in the business environments.