The World Bank in its latest report has forecast that India will retain its world’s fastest-growing major economy tag. It has forecast a growth rate of 7.3 per cent for current financial year (FY19) and 7.5 per cent for the next two years, reflecting robust private consumption and strengthening investment. It also said that India’s economy is robust, resilient and has potential to deliver sustained growth. However, it expected the global growth rate to go down to 3 per cent in 2019 and 2.9 per cent in 2020.
The report further highlighted that India’s growth potential is about 7 per cent, and it is currently growing at a pace above its potential, attributing it to the major economic reforms and fiscal measures undertaken by the government. Besides, it pointed out that 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.
The World Bank added that in India there has been a further deterioration in trade and current account balances on account of accelerating import grown amid strengthening domestic demand and higher energy prices. The global economic picture painted by the bank is not as rosy as it is for India. India has overcome the temporary disruptions caused by the implementation of the Goods and Services Tax (GST) by mid-2017 and manufacturing output and industrial production have continued to firm.
