Fiscal Deficit May Reach 3.5% of GDP In FY 2019, No Major Impact

Morgan Stanley, a leading global financial service firm brings good news for India, the economy is supposed to be on a recovery path in fiscal year 2018–2019 with a growth percent of 7.5%.

Fiscal Deficit May Reach 3.5% of GDP In FY 2019, No Major Impact

Morgan Stanley report stated on Sunday, January 21, 2018, that India will see an increase of 3.5% in GDP in the upcoming fiscal year, 2018–2019. The report states that the fiscal deficit can widen to 3.5% in the next financial year which was 3.4% in the running fiscal year, 2017–2018.

As per Morgan Stanley there are also minimal levels of macro stability risks in 2018–2019. It is also expected that the contribution in rural schemes and social work will be same as the current year, policy makers will be more focused on improving the efficacy of public spending in the next year.

The country is going to witness couple of elections in the upcoming years, elections in several states in 2018 and subsequently general elections in May 2019, respectively. The private investment scenario for India does not seem to be strong enough to handle the expenses of these two elections. The report also said that though spending will increase there is less chances if inflation to be caused by this. So overall, Indian economy is going to see a stable growth in the upcoming year and as per Morgan Stanley report, it will be on a recovery path.

As inflation is not going to be a major issue next year though growth rate will be good, India can see more global investments coming in along with a rise in the standard of living for the common people of the country. These reports are seen to be very crucial especially at the face of the Union Budget which is supposed to be declared on February 1, 2018.