India Fastest Growing Economy For Next Two Years, Projected To Grow At Rate Of 7.5% In 2019-2020

World Bank on Tuesday released its Global Economic Prospects Report titled ¡®Darkening Skies¡¯. The title is in sync with the global economic prospects which according to World Bank have darkened due to tightening financial conditions and elevated trade tensions.

The report emphasised that recovery in emerging markets and developing economies has stalled and that many countries have also experienced significant financial stress. However, the skies are absolutely clear and the Indian economy has a bright future ahead since India¡¯s GDP is expected to grow at 7.3% in 2018-19 followed by 7.5 per cent in the next two fiscal years as well.

With this India will continue to be the fastest growing economy in the world. The global growth has been projected at a rate of 2.9%, one per cent below last year¡¯s growth which stood at 3%.

Source: World Bank Report

Source: World Bank

¡°In India, 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 read.

World Bank Prospects Group Director Ayhan Kose told PTI, "India's growth outlook is still robust. India is still the fastest growing major economy."

¡°Growth is projected to accelerate to 7.1 per cent in 2019. This mainly reflects strengthening domestic demand in India, as the benefits of structural reforms such as GST harmonization and bank recapitalization take effect.¡± the World Bank report said.

Photo: BCCL

Meanwhile, for India¡¯s neighbour- China a slower growth has been projected at a rate of 6.2 per cent in 2019 and 2020 as compared to 6.5 per cent in 2018. "The fact is that Indian economy is being able to deliver growth slightly above its potential is a very good sign,¡± Kose had said.

While growth in advanced economies is estimated to have slightly decelerated to 2.2 per cent last year, it is still above potential and in line with previous forecasts. The report highlighted that though a low probability of recession in the United States gradual slowdown in China is predicted, weaker-than-expected activity in the world¡¯s two largest economies could have a severe impact on global economic prospects.

A World Bank official told PTI that the economic growth performance of India as compared to other emerging markets has been quite impressive.