(Eds: Dropping words in para 1)New Delhi, Jan 18 (PTI) India Ratings and Research todayprojected the country's economic growth to improve to 7.1 percent next fiscal from 6.5 per cent this year, buoyed by robustconsumption demand.
In its outlook for 2018-19, the agency said there will bea gradual pick up in growth momentum owing to structuralreforms like GST and Insolvency and Bankruptcy Code (IBC) inplace.
"While the implementation of GST is likely to benefitthe economy over the medium to long term, the same cannot besaid about the impact of demonetisation," India Ratings &Research (Ind-Ra), a subsidiary of Fitch Ratings, said.
Ind-Ra expects gross domestic product (GDP) to grow 7.1per cent year-on-year in 2018-19, it said.
The projection is a tad lower than 7.4 per cent growthestimated by Asian Development Bank (ADB) and InternationalMonetary Fund (IMF) for next fiscal.
Ind-Ra said but for demonetisation and Goods andServices Tax (GST) implementation, growth would not havedecelerated to 7.1 per cent in 2016-17 and 6.5 per cent in2017-18.
With the global crude prices firming up, Ind-Ra expectsretail and wholesale inflation to come in at 4.6 per cent and4.4 per cent, respectively in 2018-19, indicating an end tothe current rate cut cycle.
There is still some fuzziness with respect to theintensity and the level of its future trajectory, it said,adding that the RBI "will remain in a pause mode for anextended period of time".
The agency said it expects fiscal deficit in 2017-18 tocome in at 3.5 per cent, overshooting the budgeted estimate of3.2 per cent.
"Despite 2018-19 being a pre-election year, Ind-Ra doesnot expect the Union Budget to be a populist budget. However,it expects some expenditure reallocation with an increasedfocus on the rural and agriculture sectors," it said.
The agency expects fiscal deficit in 2018-19 to be at 3.2per cent, higher than 3 per cent stated in the medium-termfiscal policy statement.
A mix of global and domestic factors will keep theIndian rupee range bound at average Rs 66.06/USD in 2018-19,it said. PTI JDANU.
This is unedited, unformatted feed from the Press Trust of India wire.