New Delhi: India is likely to grow “near trend” in 2019 despite external and domestic challenges, global rating agency Moody's Investors Service said on Tuesday. Stating that growth prospects for other emerging markets are more mixed, the agency said: “India and Indonesia are likely to grow near trend despite external and domestic challenges.

In contrast, Argentina, Brazil and South Africa face below-trend growth, and we expect Turkey to be in sharp recession”. India’s gross domestic product (GDP) grew 8.2% in the April-June quarter propelled by a double-digit growth in manufacturing and better farm sector performance after growing 6.7% in 2017-18. India has been trying to curb its current account deficit (CAD) which jumped to 2.4% of GDP in the first quarter of 2018-19 against 1.9% in FY18 on the back of depreciation in the rupee and a surge in the price of crude oil. The report noted that the picture in G-20 emerging markets is more varied.

Their growth in 2019 will be meaningfully slower in 2019 than in 2018, at around 4.6% against 5.0% in 2018, it said. Moreover, a number of emerging and frontier markets are particularly exposed to tightening global financial conditions and rising US trade protectionism. “Outside Europe, political risks include the uncertainty around economic and fiscal reforms following the election of Jair Bolsonaro in Brazil, the upcoming elections in India, Indonesia and Tunisia and policy paralysis in Lebanon,” it said. Moody's Investors Service also expects larger emerging markets, like India, Indonesia, Brazil, Turkey and Argentina, to continue monetary tightening in 2019. Rising global interest rates, tightening global liquidity conditions and elevated oil prices leave few emerging markets with any further capacity to ease, it said.