ADB expects Indian economy to recover, grow at 7% this fiscal

Asian Development Bank expects the Indian economy to pick up in the coming quarters and grow by 7 per cent this fiscal.

“We expect India to grow by around seven per cent this year and 7.4 per cent next year,” said Kenichi Yokoyama, ADB Country Director in India.

Though the agency does not estimate quarterly growth, Abhijit Sen Gupta, Economist, ADB India Resident Mission, said the leading indicators such as sale of commercial vehicles and indirect tax collections are encouraging.

“We expect growth to pick up in the coming quarters,” he told reporters here on Monday.

Official data on second quarter GDP growth will be released by the Central Statistics Office on November 30, amidst expectations that the economic activity would have picked up after the impact of demonetisation and roll out of Goods and Services Tax wore out.

The economy grew by a mere 5.7 per cent in the April to June quarter this fiscal.

India Ratings said that it estimates GDP growth to improve to 6.5 per cent in the July to September quarter and gross value addition to expand by 6.4 per cent.

Industry chamber FICCI said it expects second quarter GDP growth at 6.2 per cent and economic growth in 2017-18 at 6.7 per cent.

“The slowdown in the economy due to demonetisation and the adjustment impact of GST implementation seems to be bottoming out and as the new indirect tax regime stabilises, the economy would see an improvement in its performance,” it said in its Economic Outlook Survey.

Morgan Stanley expects real GDP growth to accelerate from 6.4 per cent this year to 7.5 per cent in 2018 and further to 7.7 per cent in 2019.

Meanwhile, ADB said it would provide loans up to $4 billion on an annual basis, including non-sovereign debt, during 2018-22.

As part of the country strategy 2018-22, annual sovereign funding will increase from $2 billion to $3 billion while private sector funding would be doubled to $1 billion, Yokoyama told reporters.