Economic growth in India is expected to strengthen to 7.3% in financial year 2018-’19, backed by strong performance in construction, manufacturing and services sectors, says a report by BMI Research, reported PTI on Wednesday. According to the report, the shock of demonetisation and GST implementation has “largely subsided”.

The report suggests that construction is likely to receive a boost from increased public infrastructure spending aimed at improving the nation’s transport and rural infrastructure. Solid economic activity in the United States and the United Arab Emirates would support a further expansion of the export manufacturing sector.

The report added that the Narendra Modi government’s “continued economic liberalisation will likely provide tailwinds for India’s large services sector, which accounts for slightly more than half of the economy”, reported India Today.

Rise in foreign direct investment (FDI) as a result of ongoing improvements to domestic business conditions is also expected to boost growth, reported PTI. Regulatory amendments to encourage higher foreign investor participation such as the liberalisation of domestic single brand retail trading to 100% ownership through FDI will also help in growth, the report said.

BMI Research is a firm that provides macroeconomic, industry and financial market analysis, covering 24 industries and 200 global markets, according to India Today. Its prediction is close to the Reserve Bank of India’s estimate, which pegged the GDP growth rate at 7.4% in the current fiscal.

The BMI Research report also mentioned that “growth is likely to slow in Bangladesh and Pakistan due to factors such as rising political uncertainty and increasing economic imbalances, respectively,” PTI said.