"We expect GDP growth to pick up to 7.3 per cent in FY19 and the gross value added growth to stand at 7.1 per cent," its economists said in a note.

The government's official estimate for FY18 growth stands at 6.5 per cent, much lower than what experts would call as the potential, and restricted by the GST implementation and effects of the note ban.

HDFC Bank said a normal monsoon will support rural consumption and additionally, help will also come from farm loan waivers.

A surge in salaries for government servants through the implementation of the seventh pay commission will also help.

The Government will focus on rural sector and infrastructure, including road, railways and affordable housing, it said.

Efficiency gains from GST rollout and a disappearance of the demonetisation reverses will give a positive base effect for the growth, it said.

On the negative side, it warned of a surge in oil prices causing the 'twin deficit' problem with a surge in fiscal and current account gaps, sluggish global growth and a rise in consumption restricting the consumption.

Even as it put governments at the centre and states adopting fiscal consolidation path as one of the factors which can negatively impact growth, it estimated the central government to not narrow the FY19 fiscal deficit to the targeted level of 3 per cent under an adopted path.

It said the fiscal deficit for FY19 will come at 3.2 per cent. The bank economists also expect the current account deficit to widen to 2.5 per cent for FY19, from the 1.5 per cent expected for FY18.

On the inflation front, it said price-rise will peak to 6 per cent by mid-2018 on a low base and cool-off in the second half of the financial year.

It expects a hike of 0.25 per cent in the policy rate by the Reserve Bank during the financial year 2018-19.

Even as the CSO data estimated an uptick in gross fixed capital formation, HDFC Bank said this is due to a very low base in FY17.

The capacity utilisation rates in the economy continue to be low, impeding the private capex cycle, it said.