India, fastest growing economy for next three years, World Bank

India’s GDP will grow at a robust rate of 7.3% in 2018-19 and 7.5% for the next two years as ‘factors holding back growth in India fade’, according to a World Bank report. This makes India the fastest growing economy among the emerging nations.

China is expected to slow down slightly from 6.9% in 2017 to 6.5% in 2018, 6.3% in 2019 and 6.2% in 2020, it said.

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“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, told media persons.

This is a change from the Bank’s twice-a-year South Asia Economic Focus (SAFE) report in April which said that disruptions due to demonetisation and events surrounding the implementation of GST led to a setback in economic activity and a potentially larger negative effect on the poor and vulnerable. However the country has recovered from the withdrawal of large denomination bank notes in November 2016, and the rollout of the Goods and Services Tax (GST) in July 2017, it had added.

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In the June 2018 edition of the Global Economic Prospect report, a flagship publication on the state of the world economy released on Wednesday, the Bank said that India now has robust private consumption and strengthening investment . It said that growth in South Asia is projected to strengthen to 6.9% in 2018 and to 7.1% in 2019, mainly as “factors holding back growth in India fade.”

The GDP growth rate is a reiteration of SAFE report which said “Growth is expected to accelerate from 6.7 per cent in 2017 to 7.3 per cent in 2018 and to subsequently stabilise supported by a sustained recovery in private investment and private consumption.”

India’s growth projections remain unchanged since its January 2018 forecast.  The two caveats to achieving this growth are – mounting global trade tensions and higher oil prices.

 

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