India’s GDP to grow 7.2% in 2017-18: World Bank Report
In a new World Bank report titled Globalization Backlash, the agency expects India’s gross domestic product to spike to 7.2% in the financial year 2017-18 from 6.8% the previous fiscal. It has also forecasted that the ‘fiscal, inflation and external conditions’ in the country to remain stable and India’s economic growth to rise gradually to 7.7% in 2019-20, “underpinned by a recovery in private investments”.
The agency has stated that despite renewed weakness in private investment and sluggish external demand, India continued to grow robustly until ‘demonetisation’ slowed the growth, albeit modestly. It expects that inflation would stabilise with the support of favourable investment climate and structural reforms.
The agency, however, has warned India against significant risks to its favourable growth outlook. Among them, it has underlined uncertainties in the external environment, not-so clear picture of the impact of demonetisation on small and informal firms, obstacles to private investment and rapid hikes in the prices of oil and other commodities.
The agency’s report focuses on the economic climate in South Asia and maintains that South Asia will remain as the fastest growing region in the world. It has observed that strong performance of the region’s eastern part particularly India, Bhutan and Bangladesh has defied disappointing world growth in 2016. It has further stated that the current globalization backlash should not prevent South Asian countries from having a stronger outward orientation.
World Bank is one of five institutions created at the Breton Woods Conference in 1944. World Bank is part of the United Nations system, but its governance structure is different. World Bank’s headquarter is situated at Washington DC. World Bank’s official goal is to reduce poverty. It provides loans to developing countries for capital programmes.