Showcasing India as one of the fastest growing economies, the World Bank has projected a strong growth rate for the country at 7.2 per cent this year as against 6.8 per cent growth in 2016.
“Even as the World Bank revised India’s growth figures by 0.4 per cent points as compared to its January forecast, the country remains the fastest growing major economy in the world,” officials from the World Bank said.
The growth projection by the international organisation for China remains unchanged at 6.5 per cent for 2017.The next projection for China would be 6.3 per cent for the next two years 2018 and 2019.
The World Bank in its latest “Global Economic Prospects”, projects India’s growth to 7.5 per cent in 2018 and 7.7 per cent in 2019.
Furthermore, the forecast has been downgraded by 0.3 per cent and 0.1 per cent points as compared to that of the January 2017 forecast for two years, as suggested in the report.
“A downgrade to India’s fast pace of expansion is mainly reflecting a softer-than-expected recovery in private investment,” said the World Bank.
“In India, recent data indicate a rebound this year, with the easing of cash shortages and rising exports. An increase in government spending in India, including on capital formation, has partially offset soft private investment,” it said.
“While manufacturing Purchasing Managers’ indexes have generally picked up, industrial production has been mixed,” the Bank said in its latest report.
“Observing that India’s growth is forecast to increase to 7.2 per cent in Financial Year 2017 and accelerate to 7.7 per cent by 2019, is slightly below previous projections, the Bank said this outlook mainly reflects a more protracted recovery in private investment than previously envisaged.
“Nonetheless, domestic demand is expected to remain strong, supported by ongoing policy reforms, especially the introduction of the nationwide Goods and Services Tax (GST),” it said.
“Significant gains by the ruling party in state elections should support the government’s economic reform agenda, which aims at unlocking supply constraints, and creating a business environment that is more conducive to private investment,” the Bank said.