India outpaces China in Q1 2018: Fastest GDP growth since demonetisation, GST, says poll; what lies ahead


India outpaces China in Q1 2018: Fastest GDP growth since demonetisation, GST, says poll; what lies ahead

India’s economy probably gained a little momentum in the first three months of 2018 which should ensure that it remains the world’s fastest growing major economy, a Reuters poll found.

Gross domestic product expanded an annual 7.3 percent in the first three months of 2018, the May 24-29 poll of 55 economists predicted, a touch faster than the 7.2 percent achieved in the last three months of 2017 — and well above China’s pace of 6.8 percent for the quarter ending in March. Forecasts ranged from 6.9 to 7.7 percent.

If the poll is right, January-March would have the fastest expansion since before the government’s surprise decision in November 2016 to scrap high-value currency notes and a botched implementation of a goods and services tax (GST) in July last year stalled growth.

“Domestic dynamics are very strong and external volatility won’t derail the current economic recovery,” noted Hugo Erken at Rabobank, one of the most accurate forecasters on India GDP, and whose view is that growth reached 7.7 percent on a normal basis, well above the 7.3 percent median. On a gross value added basis, he expects growth of 7.5 percent, higher than the 7.1 percent median in a Reuters poll for that metric. Read More

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