The World Bank in its latest forecast has stated that India will continue to remain the fastest growing major economy in the world for the 2018-19 fiscal year too. As per reports, the organisation has predicted that India will maintain a growth rate of 7.3% in its GDP in 2018-19.
India’s GDP is expected to grow at a rate of 7.5% in the 2019-20 financial year. In comparison, China is expected to grow at a much slower rate of 6.3% in 2018-19 and 6.2% in the 2019-20 financial year.
The World Bank had predicted the 2018-19 GDP figures to be at 7.3% and has maintained that. In the 2017-18 FY, India’s registered growth rate was 6.7%.
World Bank Prospects Groups director Ayhan Kose has stated, “India’s growth outlook is still robust. India is still the fastest-growing major economy,”.The minor slowdown in 2017-18 was attributed to the major economic reforms like GST and demonetisation.
The World Bank report says, “In India, the growth has accelerated, driven by an upswing in consumption, and investment growth has firmed as the effects of temporary factors wane. However, rising interest rates and currency volatility are weighing on activity.”
The report has stated that though demonetisation and GST did pose a temporary setback for growth figures, the two reforms have contributed significantly towards the shift from the informal to the formal sector.
Recently, India’s Central Statistics Office (CSO) had also released the advance estimates of the GDP in pursuant to the release calendar of National Accounts by Ministry of Statistics and Programme Implementation. As per the figures, the growth in terms of GDP is estimated at 7.2% as against 6.7% in 2017-2018.
The estimates by the World Bank’s GEP for the current year falls between the estimates by India’s CSO and the International Monetary Fund. IMF had predicted a 7.4% GDP growth for 2018-19.
However, the World Bank estimate paints a grim picture of the global economy in the coming years. While it has stated that the upcoming cycle of general elections in South Asia might elevate political uncertainty in the region, in some countries, the challenging political climate could even adversely affect the ongoing reform agenda and economic activities.
Overall. the global economy is expected to grow at a mere 2.9% this year, compared to the 3% of last year. For the next two financial years, the global economy is expected to grow at 2.8% only.
The growth of many advanced economies is expected to drop to 2% this FY. Rising borrowing costs, slowing external demand and constant policy uncertainties are expected to affect the economies of many countries. The forecast for advanced economies in the next two financial years is pegged at 1.6% and 1.5% respectively.