The Asian Development Bank on Monday envisioned a positive picture for the Indian economy, predicting that it is on track to meet its projected growth target of 7.4% in 2016-17 and 7.8% in the next fiscal. Morgan Stanley also revised its growth estimate for this year from 7.5% to 7.7%. The global financial services reviewed its prediction for 2017 as well, from 7.75 to 7.8%.

According to ADB, brisk consumer spending and an uptick in the rural economy will help India achieve this goal. The Manila-based bank said a favourable monsoon is likely to boost agriculture and rural demand. It said, "Reforms like the passage of the Bankruptcy Code and the easing of rules governing foreign direct investment will facilitate business.”

ADB said India primarily faced inflation because of hiked food prices. According to Live Mint, while the core inflation remained largely unchanged, retail inflation marginally rose up to 5.77% from 5.76% in June. Besides, new orders helped India’s manufacturing sector pick up. It steadily inched up over the first quarter (April-June) of 2016-17, reaching 51.7 in June.

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The Indian economy grew at 7.6% in 2015-16 and the government expects it to grow at above 8% in 2016-17.

Asian predictions

Unlike India and China, which is also on track to meet its growth projections of 6.5%, predicted growth for Asia and the Pacific region’s developing economies for 2016 and 2017 was low. In fact, the multilateral bank said growth in such countries will drop from 5.7% to 5.6%. The ADB blamed a slowing United States economy and Britain's vote to leave the European Union, popularly called Brexit, for this, reported Reuters.

"Although the Brexit vote has affected developing Asia's currency and stock markets, its impact on the real economy in the short term is expected to be small," said ADB chief economist Shang-Jin Wei. The bank has projected inflation for developing Asia at 2.8% for 2016 and 3% or 2017. “The rise is largely due to a recovery in oil and food prices,” it added.