Economic Survey 2018 highlights

Ahead of the Union Budget, the finance ministry every year presents the economic survey which reviews the overall state of the economy in the last 12 months and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term. The Union Budget 2018-19 will be presented on 1st February, 2018. 

The Economic Survey was prepared by the finance ministry’s Chief Economic Adviser Arvind Subramanian, who estimates that gross domestic product will have grown 6.75 percent in the current fiscal year ending in March. 

 

Here are the highlights of the report: 

GROWTH 

* 2018/19 Growth seen at 7% to 7.5% y/y 

* 2017/18 GDP growth seen at 6.75% y/y 

* 2017/18 industry growth seen at 4.4%

* 2017/18 farm sector growth seen at 2.1%

* Economic management will be challenging in the coming year 

* Biggest source of upside to growth to be from exports 

* Cyclical conditions may lead to lower tax and non-tax revenues in 2017/18 

* Private investment poised to rebound 

FISCAL DEFICIT 

* Target for fiscal consolidation specially in a pre-election year can carry a high risk of credibility 

* Current account deficit for 2017/18 expected to average 1.5-2% of GDP 

* Pause in general govt fiscal consolidation cannot be ruled out in 2017/18 

* Suggests modest (fiscal) consolidation that signals a return to the path of gradual but steady deficit reductions 

INFLATION

* Persistently high oil prices remain a key risk, to affect inflation 

* If inflation doesn’t deviate from current levels policy rates can be expected to remain stable 

* Average CPI inflation seen at 3.7% in 2017/18 

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