India's economy will accelerate to 7.5 per cent in 2018-19 and there is a slim chance of the much-feared rate hike by the central bank in the near-term as inflation risks abate, says a report.


The economic momentum in the current financial year was affected by temporary disruptions on account of demonetisation and GST implementation but a rebound in the next financial year is likely, the Deutsche Bank report said today.


"We remain optimistic about a growth rebound in FY19. We are currently forecasting 7.5 per cent y-o-y real GDP growth for FY19," it said.


It further noted that the next few months will be critical to assess the shape of growth recovery, direction of global oil prices, forecast of summer monsoon, the extent of increases in minimum support prices, and the degree of volatility in global financial market markets.


Under Deutsche Bank's base case scenario, policy rates are likely to remain steady at 6 per cent through 2018, which would help the growth recovery to gain traction and sustain in the quarters ahead.


Growth bottomed in April-June 2017 (5.7 per cent) and has started stabilising since July-September 2017 (6.3 per cent), albeit at a modest pace. PTI