Washington : India’s economy will see a robust growth of 7.3 per cent this year and 7.5 per cent for the next two as “factors holding back growth in India fade”, the World Bank has forecast, allowing the country to retain the tag as the world’s fastest growing major emerging economy.
“India’s economy (today) is robust, resilient and has potential to deliver sustained growth,” Ayhan Kose, Director of the Development Prospects Group at the World Bank, said.
Growth in India is projected to advance 7.3 per cent in fiscal year (FY) 2018/19 (April 1, 2018-March 31, 2019) and 7.5 per cent in FY 2019/20, reflecting robust private consumption and strengthening investment, the bank said in its June 2018 edition of the Global Economic Prospect report.
The report, released on Tuesday, is the global lender’s flagship publication on the state of the world economy.
It said that growth in South Asia is projected to strengthen to 6.9 per cent in 2018 and to 7.1 per cent in 2019, mainly as “factors holding back growth in India fade.”
Previously international lenders have said the demonitisation and the initial hiccups in the implementation of the Goods and Services Tax (GST) had impacted India’s growth.
India retains the tag of the fastest growing country among the world’s major emerging economies, Kose said.
India’s growth projections remain unchanged since its January 2018 forecast.
India’s growth potential is about 7 per cent, and it is currently growing at a pace above its potential, he said, attributing it to the major economic reforms and fiscal measures undertaken by the government.
“India is doing well. Growth is being robust. Investment growth remains high. Consumption remains strong. All in all these numbers are encouraging,” Kose said, referring to the World Bank report on India’s growth rate figures.
“And India is the fastest growing economy in major emerging markets,” he said.
Noting that India’s growth prospects are strong, the official said the potential growth rate of India is around seven per cent.
“However, you look at it, India is in a very strong position,” he said.
“In terms of economic growth, the fact that India is able to deliver a robust consumption growth, robust investment… All these are good news. The big issue is now that India has a potential to sustain this growth and we are optimistic about India to realise that potential,” Kose said.
Seeking an increasing female labour force participation, he said on the productivity side India has room for improvement in secondary education completion rates.
Noting that there are risks that all emerging market economies are facing because of global economic developments, he said, for example the disorderly tightening of global financial conditions could have implications for emerging market economies.
“There is trade tensions out there. These tensions have been escalating in recent weeks. These have implications for growth prospects as well,” he said.
RBI retains 7.4% GDP growth outlook
MUMBAI: The RBI on Wednesday retained growth projections for the current fiscal at 7.4 per cent on hopes of further boost to investments and higher consumption. The Indian economy had grown at 6.7 per cent last fiscal.
RBI said however that the sharp rise in petroleum product prices is likely to impact disposable incomes. The central bank said domestic economic activity has exhibited sustained revival in recent quarters and the output gap has almost closed.
“Investment activity, in particular, is recovering well and could receive a further boost from swift resolution of distressed sectors of the economy under the Insolvency and Bankruptcy Code,” the monetary policy statement issued by the RBI said.
On the basis of an overall assessment, GDP growth for 2018-19 is retained at 7.4 per cent as in the April policy, the RBI said.
