Election next May, calculations started already.

"How the economy performs in the current fiscal year is especially significant, since it will form the backdrop to the general elections next year," wrote M Chakravarty. The International Monetary Fund, or IMF, has just published its World Economic Outlook, or WEO, with predictions for India in 2018. Growth in GDP will increase to 7.4% from 6.7% this year. This will be "lifted by strong private consumption". Which is strange because the RBI's survey showed a decline in consumer confidence since December 2017 and a decline in proposed consumer spending. "Households' current perception on the general economic situation dived sharply from the neutral level polled in the last round. The one year ahead outlook also deteriorated, but remained in the optimistic domain," said the RBI. Investment will increase just a little to 32% from 31.7% in 2016-17 because of a pick up in savings which will remain at 29.7% of GDP, like last year, way below the heights of 33.5% of GDP in 2012-13. Exports in goods and services will rise by 8.2% but imports will rise by only 8.1%. Despite that Current Account Deficit, or CAD, is expected to increase to 2.3% of GDP. This despite the fact that India receives the highest remittances from our diaspora working in other countries. Last year we received a total of $69 billion in remittances. If this were to fall because of the effect of low oil prices on Middle East nations, or the 60,000 Indians with H1B visas in the US whose spouses will no longer be allowed to work then the CAD could be higher. If, on the other hand, the price of oil were to go up it will be good for oil economies but it will hit Indian consumers hard because fuel prices are already at their highest since 2013. In addition, the Federal Reserve in the US may tighten monetary policy at a faster rate which could decrease inflows of foreign funds into India and increase interest payments of companies which have borrowed abroad. The IMF has cautioned on the risks of reduction in foreign fund inflows into emerging markets. Inflation is likely to remain at around 5% creating fears of a rate hike by the RBI. The combined fiscal deficit of center and states will come down from 6.9% of GDP to 6.5% due to higher tax collection, said the WEO. Which is not surprising as the recent Goods and Services Tax, or GST, is one of the most complex and the second highest rate in the world, said the World Bank. Seems that households are right to be pessimistic. Will things improve before elections?