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Economic growth appears to have slowed down in FY 19; muted exports among one of the reasons: Fin Min report

Updated: May 03, 2019 06:06:25am
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Economic growth appears to have slowed down in FY 19; muted exports among one of the reasons: Fin Min report

New Delhi, May 3 (KNN) India’s economy appears to have slowed down slightly in 2018-19 due to declining growth of private consumption, tepid increase in fixed investment and muted exports, according to Finance Ministry report.

In its monthly economic report for March month, the Finance Ministry said “The Indian economy is the fastest growing major economy and is projected to grow faster in the coming years. However, India’s economy appears to have slowed down slightly in 2018-19.The proximate factors responsible for this slowdown include declining growth of private consumption, tepid increase in fixed investment and muted exports.”

On the supply side, the challenge is to reverse the slowdown in growth of agriculture sector and sustain the growth in industry, it added.

It mentioned that on the external front, current account deficit as ratio to GDP is set to fall in Q4 of 2018-19, which will limit the leakage of growth impulse from the economy. The fiscal deficit of the central government has been gliding down to the FRBM target.

The Ministry said “Monetary policy has attempted to provide a fillip to the growth impulse through cuts in repo rate and easing of bank liquidity. The room for this monetary easing has been created by low inflation in 2018-19, although it has started to inch up in last few months of the year.”

The real effective exchange rate has appreciated in Q4 of 2018-19 and could pose challenges to the revival of exports in the near future. Increase in foreign exchange reserves in Q4 of 2018-19 on account of improvement in trade balance has increased the import cover for the economy, it pointed.

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