India Leads Asia Growth Story: Expected To Grow 7.1 Per Cent In 2018 and 7.6 Per Cent In 2019

India could grow at an annual rate of 7.1 per cent for fiscal year of 2018 and 7.6 per cent for fiscal year of 2019, according to an observant report on Asia's outlook for the year by the HSBC. Compared to India, Asia's average 2017 growth forecast is at 4.9 per cent; China and the Philippines are projected to grow at 6.5 per cent throughout the year, while Indonesia at 5.1 per cent.

As for the current fiscal year that ends March 2017, India’s growth is expected at 6.3 per cent; India’s fiscal 2018 will run from April 2017 to March 2018. The year of 2017 is predicted to witness key reforms, and follow-up actions to them. One of these reforms is to replace its byzantine tax structure as early as April, though some experts reckon its final roll out could be delayed further.

HSBC's chief India economist, Pranjul Bhandari, stated that investors were confident about India.

Inflation is in single digits, the twin deficits are under control and foreign exchange reserves are at comfortable levels…India is likely to witness two big 'reforms' over the year - the play-out of the demonetisation drive and the implementation of the Goods and Services Tax (GST) bill. The hope is that both of these are followed up by necessary actions, which are critical to reaping long-term gains.

On the other hand, China, the world's second largest economy is now showing signs of stabilisation, supported by recent economic data. In 2016, the Chinese government announced a series of property market cooling measures to address concerns of a real estate bubble. Many reports cite cities tightened rules for home purchases. Qu Hongbin and Julia Wang HSBC economists said in the report they expect more policies from Beijing in 2017 aimed at containing property prices in major cities. Generally, they expect Chinese policy to remain expansionary.