Amid rebounding exports and higher industrial & agricultural output, Asian Development Bank (ADB) has retained Indian growth forecast at 7.3 percent for the current fiscal and 7.6 percent for the next financial year 2019-20.
However, ADB listed some of the downside risks to these projections such as tightness in credit flow due to stress in the non-banking financing sector, limited fiscal space for public capital expenditure and escalating trade tensions. But, it hopes that some of the risks to the economy could be offset by the recent decline in crude oil prices and competitive exports due to rupee depreciation since the beginning of this calendar.
Asian Development Bank further blamed factors like weak food prices, dampening rural consumption, higher oil prices and rising raw material costs for the slowdown in Q2 and noted that the fall in growth was a bit steeper than anticipated. Meanwhile, India saw a moderation in GDP growth to 7.1 per cent during July-September quarter from 8.2 per cent in April-June.