British lender HSBC on Wednesday said waning effects from the GST impact will help push the Indian GDP growth to 7 per cent in FY19. It can be noted that International Monetary Fund has come out with an estimate of 7.4 per cent growth two days ago.
“For India, we are expecting the economy to grow in the next three years (FY18-20) by 6.5 per cent, 7 per cent and 7.6 per cent,” the bank’s chief economist Pranjul Bhandari told reporters on a conference call.
She added that the growth has slid from previous year’s 7.1 per cent to 6.5 per cent in FY18 due to the implementation of the Goods and Services Tax (GST). “As some of the short-run disruptions caused by GST get ironed out, we expect growth to rise in the next couple of years,” she noted.
Bhandari added that from a medium-term perspective of about three years, the bank expects GST alone to add 0.40 per cent to the GDP growth figure. It’s newly appointed country head Jayant Rikhye also said that the Indian economy is well positioned to grow once the GST-related difficulties are overcome.
In a January 2 report, where it had first come out with the 7 per cent growth estimate for FY18, the bank had spoken about the note ban as the second factor apart from GST which had impacted the growth.
Without disclosing its presence in the important trade corridor, the bank said its presence in six of the ten countries makes it possible for it to be more active.
With a cross-border trade of USD 64 billion in 2016, the Asean block is the country’s fourth biggest trading partner.