India’s economy will see a robust growth of 7.3 percent this year and 7.5 percent 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, told the audience and media.
Growth in India is projected to advance 7.3 percent in Fiscal Year (FY) 2018/19 (April 1, 2018-March 31, 2019) and 7.5 percent 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 yesterday, 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 percent in 2018 and to 7.1 percent in 2019, mainly as factors holding back growth in India fade.
India retains the tag of the fastest growing country among the world’s major emerging economies, Ayhan Kose, Director of the Development Prospects Group at the World Bank.
“India’s economy (today) is robust, resilient and has potential to deliver sustained growth,” Mr Kose said.
China is expected to slow down slightly from 6.9 percent in 2017 to 6.5 percent in 2018, 6.3 percent in 2019 and 6.2 percent in 2020, it said.
India’s growth potential is about 7 percent, 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 NDA 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 percent.
“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 realize that potential,” Mr. Kose said.
Seeking an increasing female labor 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.
Like other oil importers, India is also facing a higher oil price, he said.
In its latest report, the bank said in India, investment growth has firmed recently, as the effects of temporary factors wane.
It said that growth in South Asia is projected to accelerate to 6.9 percent in 2018, mainly reflecting strengthening domestic demand in India as temporary policy-driven disruptions fade.