World Bank forecasts predict that India is projected to regain its position as the world's fastest growing major economy by achieving a growth of 7.3 per cent this fiscal and 7.5 per cent in the next two “as factors holding back growth in India fade”. The bank's Global Economics Prospects report said that growth projections reflect “robust private consumption and strengthening investment.” “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 report said.
The report said that 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. It also said that per capita growth rates “are strong” and are expected to help bring down poverty in coming years. The World Bank forecasts are slightly lower than two other projections by international bodies published in April and May. The UN projected a growth rate of 7.5 per cent for 2018 and 7.6 per cent for 2019 in May, while in April, the International Monetary Fund forecast 7.4 per cent for 2018 and 7.8 per cent for 2019.
The bank said that in India there has been a further deterioration in trade and current account balances because of accelerating import growth amid strengthening of domestic demand and heightened energy prices. “After reaching 3.1 per cent in both 2017 and 2018, global growth is expected to moderate over the next two years as global slack dissipates, major central banks gradually remove policy accommodation, and the recovery in commodity exporters matures,” the report said.
