The World Bank in latest report titled ‘Globalization Backlash’, has said that India’s GDP is expected to see uptick from 6.8 per cent in 2016-2017 to 7.2 per cent by current fiscal year and rise further to 7.5 per cent in 2018-19 fiscal. It also forecasted that India’s economic growth will rise slowly to 7.7 per cent in 2019-2020 supported by a recovery in private investments. It noted that the economic growth slowed down to 6.8 per cent in 2016-17 on the back of weak investments and the impact of demonetization. It also stressed that the GDP slowed to 7 per cent during the third quarter of 2016-17, from 7.3 per cent during the first half of the fiscal.
According to the report, the significant risks to economic growth could derive from fallout of note ban on small and informal economy, stress in the financial sector along with uncertainty in global environment. It also pointed out that a rapid hike in the prices of oil and other commodities could have a negative implication for the economy. However, it suggested that timely and smooth implementation of the GST could prove to a significant uptick risk to economic activity in 2017-18.
The report further said that India’s fiscal, inflation and external conditions are expected to remain stable. It also said that the centre will continue to consolidate modestly, while retaining the push towards infrastructure spending. The report stated that the country’s inflation will stabilize, underpinned by favourable weather and structural reforms. It added that normal monsoons have so far offset increases in petroleum prices.
Specifying about the external factor, it said that exchange rate has appreciated, partly reflecting expectations of a narrowing inflation gap between India and the US and limited external vulnerabilities as the current account deficit is expected to remain below 2 per cent of the GDP and fully financed by FDI inflows. It added that challenges to India’s favourable growth outlook could stem from continued uncertainties in the global environment, including rising global protectionism and a sharp slowdown in the Chinese economy, which could further delay a meaningful recovery of external demand.
Start Research-backed Investing ...Now. Subscribe to Sapphire
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: