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Economy to grow at 5.5% this fiscal: Government

Inflation (2)The government’s mid-year economic review stated that the investment is yet to pick up significantly, but the inflation has come down dramatically, according to the report tabled in parliament on Friday. The retail inflation will be seen in range of 5.1-5.8 per cent in the next five quarters, according to the review.

“Investment is yet to pick up significantly. But on the upside inflation has come down dramatically…The year (2014-15) could end with growth around 5.5 per cent,” it said.

The government’s mid-year economic review has pegged the likely GDP growth rate for 2014-15 at 5.5 percent. The review projected that 7-8 per cent economic growth was “within reach” in the coming years and said inflation has fallen dramatically and that declining oil prices will help in containing CAD at around 2 percent of GDP.

If the forecast materialises, it would mark an improvement from two successive years of below 5 percent growth.

In the first six months of the fiscal year, Asia’s third-largest economy grew an annual 5.5 percent. The government also said that it feels interest rates will remain unchanged till March 2015.

The review goes on to say that the full year tax growth is weaker than expected and that the FY15 revenue estimates were over-optimistic.

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