Mumbai: The country's economic growth is likely to accelerate to 7.7 per cent in the current fiscal on account of improvement in investment and household consumption expenditure, Standard Chartered said in a report. In FY15, the GDP growth rate stood at 7.3 per cent, marginally below the advance estimate of 7.4 per cent.
"We expect the recovery to gain further traction in FY16 as improved investment and household consumption expenditure push GDP growth to 7.7 per cent," the report said. Improved policy clarity, higher public investment, lower interest rates, stronger global demand and improved domestic business confidence should boost growth in investment to 7.2 per cent from 4.6 per cent in FY15.
The report said household consumption expenditure growth, which remained tepid in the last fiscal, is also likely to pick up to 7.6 per cent from 6.3 per cent in FY15. "Our forecast of a revival in consumption depends critically on the assumption of normal monsoon rains," it said, adding that a negative surprise on this front would weigh on rural demand and thus overall GDP projections. Fiscal constraints are likely to limit government support for rural demand, the report added. For FY17, it expects growth to pick up further to 8 per cent.
