World Bank projects Indias FY19 GDP growth at 7.3 pc

Marco Green
March 14, 2018

The report further said that global economic growth is likely to move up further as more than 75 per cent of the world economy is now enjoying an upswing, with forecasts anticipating global growth to rise to 3.6 per cent in 2017 and 3.7 per cent in 2018, from 3.2 per cent in 2016.

The World Bank India report, however, observed that a GDP growth of over 8% will require "continued reform and a widening of their scope". Thereafter, growth accelerated sharply for a short period from 2004 to 2008, where it averaged 8.8%, which then slowed down to a "still impressive" average of 7.1% in the 2009-17 period. "Durable revival in private investments and exports would be crucial for India achieving a sustained high growth of 8% and above". "Despite shocks such as the implementation of the Goods and Services Tax, and demonetisation, the growth path is back on trend".

As per this report, India's growth in recent years has been supported by prudent macroeconomic policy: a new inflation targeting framework, energy subsidy reforms, fiscal consolidation, higher quality of public expenditure and a stable balance of payment situation.

The Central Statistics Office predicted GDP growth to be 6.6% in the current financial year.

The World Bank projected the $2.5 trillion economy could grow at 7.3 percent and 7.5 percent in the next two years, helped by tax reforms and benign global growth.

"Accelerating the growth rate will also require continued integration into the global economy", the report added.

"Maintaining hard-won macroeconomic stability, providing a definite and durable solution to the cleaning up of banks' balance sheets, realising GST's growth and fiscal dividend, and regaining momentum on the unfinished structural reform agenda will be key for realising these rates of growth", it added.

"Yet another highlight is the resilience of India's growth", Mr Ahmed said.

It pitches for making growth more inclusive and enhancing the effectiveness of the Indian public sector.

The government estimates India's per capita income could touch 86,689 rupees ($1,337.4), or $3.7 a day, in the current fiscal year ending this month.

The report divides India's economic growth history since 1970 into four segments.

On the flip side, it said oil prices pose less of a risk for the Indian economy, the expected normalisation of monetary policy by the U.S. and the other advanced economies are likely to tighten financing conditions.

Other reports by Click Lancashire

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