India to retain fastest growing-economy status; Pakistan, Bangladesh growth to dip
Fueled by policy reforms and rebound in credit, India's economy is forecast to expand by 7.5 percent during the 2019-20 fiscal year and retain its position as the fastest growing major economy in a world of slowing growth, according to the World Bank.
Jan 9, 2019
WASHINGTON: Fueled by policy reforms and rebound in credit, India's economy is forecast to expand by 7.5 percent during the 2019-20 fiscal year and retain its position as the fastest growing major economy in a world of slowing growth, according to the World Bank.
The Bank's Global Economic Prospects (GEP) report released on Tuesday kept the forecasts made for India in its June report for the next fiscal year and the 7.3 percent estimate for the current fiscal year, up from 6.7 percent recorded in 2017-18.
However, it warned that in South Asia, the upcoming election cycle “elevates political uncertainty in the region.”
“The challenging political environment could adversely affect the ongoing reform agenda and economic activity in some countries,” it added.
The GEP presented a gloomy outlook for the world as a whole: Growth was projected to slow to 2.9 percent for the current year, down from the estimated 3 percent for the last year and to grow only by 2.8 percent in the next two years.
The report said, “India is forecast to accelerate to 7.5 percent in fiscal year 2019-20 as consumption remains robust and investment growth continues, and as (economic) activity benefits from recent policy reforms and a rebound in credit.” For the 2020-21 and 2021-22 fiscal years, the GEP projects a growth rate of 7.5 percent.
In South Asia, Pakistan's growth rate is forecast to fall drastically from last fiscal year's 5.8 percent to 3.7 percent this fiscal year “as financial conditions tighten in the face of rising inflation and external vulnerabilities.” In 2019-20 it is forecast to rebound to 4.8 percent. Bangladesh grew faster than India with 7.9 percent in the last fiscal year “driven mainly by private consumption and supported by remittance inflows,” the report said. But its growth is forecast to fall to 7 percent in the current fiscal year.