New Delhi:India’s gross-value added growth is expected to surge to 7.6 per cent this fiscal year, a marginal improvement from 7.2 per cent in 2015-16, says a DBS report.
According to the global financial services major, while private sector activity remains pretty passive, high frequency fiscal numbers point to sustained support from public capex spending.
“We expect gross-value added growth to quicken to 7.6 per cent year-on-year this year from 7.2 per cent in FY15/16,” DBS said in a research note.
According to DBS, after an upside surprise from China,India manufacturing PMIs also jumped in October, affirmingsigns of a cyclical upturn in the region. India’s OctoberNikkei manufacturing PMI ticked up to nearly two-year high of54.4 from September’s 52.1.
“The improving order pipeline is encouraging and pointsto better industrial and business outlook. Also being a defacto business confidence/sentiment gauge, these PMIs partly reflect broad optimism on the back of strong asset marketperformance and stable rupee,” the report said.
“Upcoming seasonal festive boost should provide somerelief, accompanied by better consumption on wage increasesand a normal monsoon,” the research note said.
Regarding inflation, the report said that price pressuresmeanwhile are under watch with the headroom for monetaryeasing likely to narrow going into next year.
Monetary policy committee (MPC) lowered repo rate to 6.25 per cent from 6.50 per cent at the end of 2-day deliberationson October 4.
The next meeting of the MPC is scheduled on December 6and 7.