Indian economy will continue to have V-shaped recovery: Finance ministry

As per the second advanced estimates of the Central Statistics Office, the economy is expected to grow at 6.6% in the current fiscal ending March 31, compared to 7.1% in 2016-17.

The 7.2% expansion in the economy during the October-December quarter has put the country in one of the highest growth bracket in the world and recovery will continue to be sharp going ahead, economic affairs secretary Subhash Chandra Garg said on Thursday.

Economic affairs secretary Subhash Chandra Garg in New Delhi on February 1.(HT File Photo)

The third quarter growth of 7.2% was highest in five quarters. The previous high was recorded at 7.5% in the July-September quarter of 2016-17.

In the first quarter of the current fiscal, the GDP grew at 5.7%, while the second quarter growth stood at 6.5%.

“We have said this earlier that the first quarter (of FY18) was where we bottomed out, and we would see a very strong V-shaped recovery. The growth in the second and third quarter brings evidence to that,” Garg told reporters on the sidelines of an IVCA event here.

“The third quarter grew at 7.2% and it puts us in the highest growth bracket in the world. I see no reason why that V-shaped recovery should not continue henceforth. I can’t talk about double digit growth at this stage, but certainly there will be very strong growth,” he said.

As per the second advanced estimates of the Central Statistics Office (CSO), the economy is expected to grow at 6.6 per cent in the current fiscal ending March 31, compared to 7.1% in 2016-17.

Yesterday, top finance ministry officials led by Garg, chief economic advisor Arvind Subramanian and principal economic advisor Sanjeev Sanyal met Fitch director, sovereign ratings, Thomas Rookmaaker and other officials. The meeting was ahead of the annual review of the country rating by Fitch.

Garg said the global rating agency had a good assessment of the country’s future prospects.

“Fitch assessment about the Indian economy, reforms, and path forward seems to be extremely positive but whether it will result in a certain kind of upgrade and when, that is for the rating agency to decide,” Garg said.

Fitch had last upgraded India’s sovereign rating from BB+ to BBB- with stable outlook on August 1, 2006.