MUMBAI: The economy will grow up to 7.5 per cent in FY19, supported by domestic consumption, policy push, and synchronised global growth, says a report.
In the current fiscal, GDP growth is expected to be 6.5 per cent. The Economic Survey 2018 has pegged FY19 growth at 7-7.5 per cent. "After two sub-par years, interjected by demonetisation and rollout of goods and services tax (GST), growth is seen recuperating to a respectable 7.5 per cent next fiscal," CRISIL said in a report.
The key engines supporting the upturn are largely domestic and policy-driven, though a synchronous upturn in global growth will provide some tailwind. The upturn in growth will be aided partly by the low-base effect.
It said global growth is gathering pace, and the momentum in global trade is expected to continue in 2018 as well.
It should buoy exports, but the pick-up is unlikely to be material, given poor local infrastructure, higher cost of capital and labour productivity issues, it said.
The rating agency said the key risks to its forecasts stem from inability to resolve GST-related issues quickly and fiscal stress leading to a cut in capex by the Government.