World Bank trims India's growth forecast to 7% in FY17

Global growth to accelerate to 2.7% in 2017

by Janhavi Behere

The World Bank has trimmed India’s growth forecast for 2016-17 to seven per cent from 7.6 per cent in its June 2016 report. The Global Economic Prospects released on 10 January 2017, pegged India’s growth in 2017-18 at 7.6 per cent, 0.1 percentage points lower than the June 2016 projections. However, India retained its spot as the world’s fastest growing major economy.

Commenting on the downward revision to India’s growth forecast, the report states that unexpected ‘demonetization’ weighed on growth in the third quarter of FY17. Weak industrial production and manufacturing and services purchasing managers indexes (PMI), further suggest a set back to activity in the fourth quarter of FY17.

The report noted that a retrenchment in private investment, reflecting excess capacity, corporate de-leveraging and credit constraints due to impaired commercial banks’ balance sheets, also had an adverse effect on activity.

Global economic growth is forecast to accelerate moderately to 2.7 percent in 2017 after a post-crisis low of 2.3 per cent in 2016. The World Bank expects obstacles to activity recede among emerging market and developing economy commodity exporters, while domestic demand remains solid among emerging and developing commodity importers.

As per the report, USA is projected to grow by 1.6 per cent and 2.2 per cent in 2016 and 2017, respectively. China is expected to grow by 6.7 per cent in 2016 and 6.5 per cent in the following year.

References
1. https://openknowledge.worldbank.org/bitstream/handle/10986/25823/9781464810169.pdf?sequence=3&isAllowed=y
CMIE STATISTICS
Unemployment Rate
Per cent
6.0 -0.1
Consumer Sentiments Index
Base September-December 2015
97.5 -0.4
Consumer Expectations Index
Base September-December 2015
98.0 -0.6
Current Economic Conditions Index
Base September-December 2015
96.8 0.0
Quarterly CapeEx Aggregates
(Rs.trillion) Mar 16 Jun 16 Sep 16 Dec 16
New projects 3.29 1.55 2.29 1.38
Completed projects 2.26 0.90 2.15 0.71
Stalled projects 1.04 1.27 0.35 0.42
Revived projects 0.63 0.38 0.51 0.17
Implementation stalled projects 0.92 0.50 0.57 0.79
Updated on: 20 Jan 2017 9:30AM
Quarterly Financials of Listed Companies
(% change) Dec 15 Mar 16 Jun 16 Sep 16
All listed Companies
 Income -5.1 -0.2 -0.9 2.0
 Expenses -4.8 0.9 -0.4 1.7
 Net profit -2.5 -29.1 -3.3 15.4
 PAT margin (%) 4.7 4.9 6.9 7.1
 Count of Cos. 4,432 4,347 4,297 4,201
Non-financial Companies
 Income -7.8 -2.1 -2.5 0.4
 Expenses -9.2 -3.9 -2.9 -0.3
 Net profit 44.6 4.9 10.3 25.3
 PAT margin (%) 5.5 6.2 7.4 7.0
 Net fixed assets 3.8 -8.6
 Current assets 3.1 8.4
 Current liabilities 10.6 11.2
 Borrowings 6.6 3.3
 Reserves & surplus 7.8 8.4
 Count of Cos. 3,486 3,430 3,398 3,323
Numbers are net of P&E
Updated on: 20 Jan 2017 9:38AM
Annual Financials of All Companies
(% change) FY13 FY14 FY15 FY16
All Companies
 Income 11.6 9.0 3.9 -0.2
 Expenses 11.8 9.0 3.9 -0.1
 Net profit -0.1 -3.9 1.5 -11.5
 PAT margin (%) 3.6 3.2 3.3 3.6
 Assets 14.0 12.1 8.8 7.6
 Net worth 9.4 9.3 8.1 6.1
 RONW (%) 6.8 6.1 6.1 5.8
 Count of Cos. 22,526 19,648 18,100 13,336
Non-financial Companies
 Income 10.7 8.5 2.8 -1.6
 Expenses 11.0 8.2 2.9 -2.6
 Net profit -10.6 -5.3 -5.8 15.6
 PAT margin (%) 2.4 2.1 2.2 3.3
 Net fixed assets 13.4 10.4 12.3 10.3
 Net worth 7.6 8.1 6.5 5.1
 RONW (%) 5.4 4.8 4.7 6.3
 Debt / Equity (times) 1.1 1.1 1.1 1.0
 Interest cover (times) 2.0 1.9 1.9 2.2
 Net working capital cycle (days) 69 69 68 68
 Count of Cos. 17,229 15,331 14,111 10,567
Numbers are net of P&E
Updated on: 20 Jan 2017 9:51AM

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