As per the World Bank’s Global Economics Prospects report on Tuesday, Indian economy is advancing to 7.3 per cent in 2018 and 7.5 per cent in the next two years. The World Bank forecasted India as the world’s fastest growing economy “as factors holding back growth in India fade.”
“India’s economy (today) is robust, resilient and has potential to deliver sustained growth”, said Ayhan Kose, Director of the Development Prospects Group at the World Bank.
The June 2018 edition of the report stated that “robust private consumption and strengthening investment” will contribute to India’s growth in Gross Domestic Product (GDP).
“India’s GDP growth bottomed out in the middle of 2017 after slowing for five consecutive quarters, and has since improved significantly, with momentum carrying over into 2018 on the back of a recovery in investment,” said the report. By mid-2017, India’s manufacturing output remained firm despite the disruptions created by the Goods and Services Tax (GST).
The report forecasts a strong per capita growth rate that will aid the country in mitigating poverty. However the World Bank forecasts are slightly lower than that of the United Nations (UN) and the International Monetary Fund (IMF). In May, the UN forecasted a growth rate of 7.5 per cent and 7.6 per cent for the years 2018 and 2019 respectively. In April, the IMF projected a growth rate of 7.4 per cent and 7.8 per cent for the years 2018 and 2019 respectively.
The accelerating import rate amidst the strengthening domestic demand and increasing energy prices has deteriorated India’s trade and current account balances. Thus the picture painted by the World Bank for India is not so rosy.
The report mentioned, “After reaching 3.1 per cent in both 2017 and 2018, global growth is expected to moderate over the next two years as global slack dissipates, major central banks gradually remove policy accommodation, and the recovery in commodity exporters matures.” By 2019 the global growth rate is expected to go down by 3 per cent and by 2020 by 2.9 per cent.
(With inputs from IANS)