ADB upbeat on India, keeps FY19 growth forecast unchanged at 7.3%

The report said the impact of the rising oil prices is offset by robust domestic demand and rising exports, particularly of manufactures

India's economy continues on a robust growth path, the Asian Development Bank (ADB) said Wednesday while maintaining the growth forecast for the current fiscal at 7.3 per cent.

However, depreciation of the rupee and volatile external financial markets pose challenges, the multilateral lending agency added, in an update of its flagship annual economic publication, the Asian Development Outlook (ADO) 2018.

Growth remains stable across most of developing Asia due to robust domestic demand, buoyant oil and gas prices and a consolidation of India's growth rebound, it said.

"But escalating trade tensions will test the region's resilience, underscoring the importance of efforts to bolster trade ties among its countries," it added.

On India, the report said its economy continues on a robust growth path.

"Its growth forecasts are unchanged at 7.3 per cent for 2018 and 7.6 per cent for 2019 as the temporary effects of the demonetisation of large banknotes and the introduction of the national Goods and Services Tax abate as expected," it said.

The report further said the impact of the rising oil prices is offset by robust domestic demand and rising exports, particularly of manufactures.

"Depreciation of the rupee and volatile external financial markets pose challenges, as does accelerating inflation though tighter fiscal policy will help quell inflationary pressures," said the report of the Manila-based development bank.