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HSBC pegs FY14 GDP at 6.9% on reform push

Last updated on: November 8, 2012 19:30 IST

HSBC pegs FY14 GDP at 6.9% on reform push

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HSBC on Thursday said the Indian economy, which is projected to grow at 5.7 per cent this fiscal, is likely to grow at a faster pace next fiscal at 6.9 per cent following the recent spate of policy reforms.

"We expect, the economy to grow at 5.7 per cent this fiscal and 6.9 per cent in the next financial year," HSBC India and Asean chief economist Leif Eskesen said.

The FY'13 growth forecast is a bit higher than government's own growth assumptions, and way ahead of many of its own peers, which all have pegged growth this year falling to around 5 per cent.

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Image: Farmers transport wheat crop on camels at Pipalgaon village near Allahabad.
Photographs: Jitendra Prakash/Reuters.

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HSBC pegs FY14 GDP at 6.9% on reform push

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The IMF had recently pegged the growth this calendar year at a poor 4.9 per cent, while Finance Minister P Chidambaram early this week had said growth would hit a decadal low of 5.5 per cent this fiscal.

Basing his optimism for higher growth next fiscal, he said policy reforms, traction in infrastructure projects and rise in investment would be the key factors driving growth next fiscal.

"We see early signs of reforms, which is likely to improve the investment climate. Also, some traction in infrastructure projects is expected. Further, somestabilisation in global factors will also help growth next fiscal," Eskesen said.

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Image: A farmer works in his vegetable field in Jammu.
Photographs: Mukesh Gupta/Reuters.

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HSBC pegs FY14 GDP at 6.9% on reform push

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Talking about inflation scenario, he said inflation is likely to go up in the near-term after which it is likely to moderate.

Wholesale price index based inflation stood at 7.81 per cent for September, much above the comfort level of the central bank, which held back a much-sought after policy easing last month-end.

Talking about the way ahead for the economy, Eskesen said structural reforms along with loosening of monetary policy would support future growth.



Image: Labourers transport sugarcane on a hand-cart outside a wholesale market in Kolkata.
Photographs: Parth Sanyal/Reuters.
Tags: HSBC , Eskesen

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