HSBC report says,"India is expected to clock a GDP growth of 7.1 percent in 2017-18 as the country gets sufficiently remonetized and the schemes in the Budget play a supportive role".

A large number of growth is driven by the remonetization process which is expected by April end as this, in turn, would boost the consumption levels in the country.

HSBC India Chief Economist Pranjul Bhandari said,"We expect GDP to grow at 7.1 per cent year-on-year in 2017-18, up from 6.3 per cent in 2016-17, as the country gets sufficiently remonetised (by April-end), and consumption moves back to pre-demonetisation levels".
"We believe that investment, which tends to be sensitive to policy uncertainty, will continue to remain weak, keeping growth at an arm's length from the cherished 7.5-8 per cent levels," Bhandari said.

"With oil on the climb, pressure from higher government wages and Fed rates expected to rise, the space for rate cuts is quickly dwindling. We expect one final 25 bps rate cut in the cycle," he added.
On December 7, the central bank kept interest rate unchanged despite calls for lowering it and also lowered the economic growth projection by half a percentage point to 7.1 per cent in the first policy review post demonetisation.

It will hold its next monetary policy meet on February 8.

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