Manufacturing Sector shows strong growth in Second Quarter of FY 2018-19
India’s manufacturing sector has recorded robust growth driven by IT, textile and iron and steel segments in the second quarter of 2018-19 compared with the previous year, according to the Reserve Bank of India. The strength of manufacturing numbers can translate into higher GDP growth going forward.
India outshines global markets
India ended 2018 as the best performing market in Asia with the Sensex rising nearly 6 per cent over the year. Domestic Indian stocks performed well even as MSCI Emerging Market and MSCI World indices were lower by 16 per cent as US and Chinese markets registered losses. Moderation in oil prices as well as robust purchases by domestic funds have helped Indian markets withstand global headwinds since October 2018.
India remains world’s fastest growing economy
Despite high oil prices during a part of 2018 and uncertainties caused by global trade tensions, India registered GDP growth of 8.2 per cent in Q1 2018 and 7.1 per cent in Q2 2018. With this, India retains the tag of the world’s fastest growing economy ahead of China for the year. The country also got a boost as it improved its ranking in ease of doing business to 77th place, ahead by 23 places from last year. Good macro data like improved tax collections and inflation control also made India an attractive investment destination.
Rupee shows signs of strength in 2019
Thanks to falling oil prices, the strong stockpile of foreign currency with the Reserve Bank and the slightly lower current account deficit at 2.5%, there are signs that the Indian currency may show resilience in 2019. Lower oil prices will lower India’s import bills and shortcomings can be met by RBI forex reserves. Bloomberg’s top ten analysts expect the Rupee to be at 71.45 by March 2019 and 71 by the end of 2019.