The Bank of America-Merrill Lynch, one of the world’s leading financial management and advisory companies, has taken positive outlook on India GDP forecast. It has projected India GDP to grow 7.3 per cent as against the earlier projection of 7.1 per cent.
Merrill Lynch said that demand supply gap in India is likely to drive growth and inflation is unlikely to return till early 2010.
“The Reserve Bank of India had said that it would increase rates only when it is sure of economic improvement. Going by the rate of improvement seen in India, it could well be the first nation in the world to hike rates,” said Jyotivardhan Jaipuria, Head of Research -India, DSP Merrill Lynch.
Indian corporate houses having raised capital in 2009, the Merrill Lynch predicts India to witness healthier sales growth in 2010.
“The RBI interest rate hike would happen only around April 2010,” Jaipuria said.
“There is rise in global liquidity — in both developed and emerging economies — and increase is seen in earning and economic cycle.