The Asian Development Bank (ADB) stated that the Indian economy would expand by 7.3 % in fiscal year (FY) 2018 and 7.6 % in the next fiscal year.
Asian Development Outlook (ADO) 2018 report :
The Asian Development Bank (ADB) said that, this growth will be facilitated by various growth-oriented policy measures.In ADB’s Asian Development Outlook (ADO) 2018 report, it stated that the reduction in growth to 6.6 % in FY2017 was partially due to demonetization. Also, issues related to Goods and Services Tax (GST) disturbed operations of small and medium-sized enterprises (SMEs) and exporters.
ADO stated that, in the upcoming months, growth will improve with the support of various measures like improving farmers’ purchasing power, higher procurement prices, agriculture market reforms, and investments in irrigation and logistics. It said that investment revival would continue, but at a modest rate. Also, ADB projected inflation to increase up to 4.6 % in FY2018 and 5 % percent in FY2019 supported by further strengthening of global commodity prices and domestic demand.
It said that improved growth in advanced economies will help exports to improve in a healthy rate. Also, imports are expected to increase due to higher commodity prices and increase in domestic demand. The current account deficit would widen to 2.2 percent of GDP in FY2018 and 2.4 percent of GDP in FY2019. It also said that, current account deficit is expected to be financed by capital flows.