Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
Powered by cricketnext logo
»
2-min read

India Will be Fastest Growing Economy in 2018, But Faces Trade War Threat, Says Report

The recent tit-for-tat import tariffs imposed by the US and China have raised concerns about a full-fledged global trade war which could throw an otherwise-strong world economy off-course.

Reuters

Updated:April 19, 2018, 9:41 AM IST
facebookTwitterskypewhatsapp
India Will be Fastest Growing Economy in 2018, But Faces Trade War Threat, Says Report
An employee works inside a garment factory. (Representative image from Reuters)
Loading...

Bengaluru: India will claim the top spot among the world's fastest-growing major economies this year, but rising trade tensions between the United States and China may restrain that growth, a Reuters poll of economists showed.

The recent tit-for-tat import tariffs imposed by the US and China have raised concerns about a full-fledged global trade war which could throw an otherwise-strong world economy off-course.

Twenty of 29 economists who answered an extra question said India's economy will be hurt by the ongoing trade dispute. "India runs the risk of being caught in the middle of the trade spat between the US and China," said Hugo Erken, senior economist at Rabobank.

Erken said growth will take a hit if India takes sides as the side not chosen may retaliate by imposing duties. "The damage would especially be large if India retaliated with an import duty on either US or Chinese imports," said Erken, adding that such a scenario was unlikely.

However, not all economists shared that view. Nine respondents said India's economy would benefit from the dispute. "Though in the short-term a trade war between US and China may impact global trade including India, in the long-term, India is likely to benefit as China will be forced to devaluate its currency to remain a dominant player in the world market," wrote RK Gupta, managing director at Taurus Asset Management.

"In that scenario, India's exports will be more competitive with China."

The latest poll, taken April 11-18, predicted India's economy will expand 7.4 percent in the fiscal year that began this month. That is in line with the International Monetary Fund's projection and is a slight upgrade from the January poll.

For the next fiscal year, growth is expected to average 7.5 percent, a touch lower than the IMF's forecast of 7.8 percent.

After growth slowed sharply for much of last year, India regained its status as the world's fastest-growing major economy in the quarter ending December 2017.

The slowdown was mainly driven by the government's sudden 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.

But the impact of those moves has now faded. "The investment cycle is recovering, and there is steady improvement in consumption," noted Sonal Verma and Aurodeep Nandi at Nomura.

INFLATION TO PUSH HIGHER

While India's retail inflation has eased this year and hit a five-month low in March, it remained above the Reserve Bank of India's medium-term target of 4 percent.

But increased government spending ahead of national elections next year is yet to kick in and that is expected to be inflationary.

Inflation is forecast to average 4.7 percent in the fiscal year ending next March, and 4.9 percent the following year, the poll showed.

The state-run India Meteorological Department has forecast a normal monsoon in 2018 - a boon for the farm sector that accounts for about 15 percent of India's $2 trillion economy and employs more than half its 1.3 billion people.

A normal monsoon would boost grain production and keep a lid on food price inflation, which tends to be volatile, but especially in India.

The Reserve Bank of India has kept interest rates steady after a 25 basis-point cut to the repo rate in August last year. It is forecast to keep rates on hold until the second half of next year, according to the poll of almost 50 economists.

But economists have shifted their expectation for a repo rate hike to the quarter ending September next year from a move in the first three months of 2019.

| Edited by: Aditya Nair
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwitterskypewhatsapp
Most Active
Company Price Change %Gain
Indiabulls Hsg 603.00 8.55
Yes Bank 114.95 11.39
UPL 870.25 -8.42
IndusInd Bank 1,438.00 4.10
ICICI Bank 433.00 3.14
Company Price Change %Gain
Yes Bank 115.20 11.57
Indiabulls Hsg 601.00 8.21
Maruti Suzuki 6,627.75 3.02
Jet Airways 73.80 122.96
Shriram Trans 1,096.95 3.33
Top Gainers
Company Price Change %Gain
Yes Bank 114.95 11.39
Indiabulls Hsg 603.00 8.55
Sun Pharma 389.00 3.68
IndusInd Bank 1,438.00 4.10
Cipla 551.90 3.41
Company Price Change %Gain
Yes Bank 112.10 8.57
Sun Pharma 389.00 3.58
IndusInd Bank 1,438.90 4.05
Larsen 1,558.55 3.52
Maruti Suzuki 6,627.75 3.02
Top Losers
Company Price Change %Gain
UPL 870.25 -8.42
Wipro 286.75 -2.48
Adani Ports 402.20 -1.35
Britannia 2,838.00 -1.31
Tech Mahindra 726.70 -1.21
Company Price Change %Gain
HUL 1,806.85 -0.26
HDFC Bank 2,429.00 -0.02
ITC 277.25 -0.04

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results