India’s GDP will grow at 7.3% in 2018-19 and 7.5% in 2019-20: World Bank

| March 14 , 2018 , 19:41 IST

The World Bank on Wednesday released a report that predicted India’s GDP growth at 7.3% in 2018-19 and 7.5% in 2019-20. The report titled “India’s Growth Story” describes the state of the Indian economy, shares India’s growth experience and trajectory over the past several decades and provides a long-term perspective on India’s growth outlook.

The report states that the Indian economy is set to revert to its trend growth rate of 7.5 percent in the coming years as it bottoms out from the impact of GST and demonetization.

Also Read: India’s GDP Growth In Q3 At 7.2%, Usurps China As Fastest Growing Economy

India’s GDP growth saw a temporary dip in the last two quarters of 2016-17 and the first quarter of 2017-18 due to demonetization and disruptions surrounding the initial implementation of GST.

World bank says that Economic activity has begun to stabilize since August 2017.

“While services will continue to remain the main driver of economic growth; industrial activity is poised to grow, with manufacturing expected to accelerate following the implementation of the GST, and agriculture will likely grow at its long-term average growth rate.” It reads.

As per this report, India’s growth in recent years has been supported by prudent macroeconomic policy: a new inflation targeting framework, energy subsidy reforms, fiscal consolidation, higher quality of public expenditure and a stable balance of payment situation. In addition, recent policy reforms have helped India improve the business environment; ease inflows of foreign direct investment (FDI) and improve credit behavior.

The report also states that India will have to address several issues to attain a growth rate of 8 percent in the years to come. The country needs to recover private investments and exports and maintain macroeconomic stability.

World bank suggest cleaning up of banks’ balance sheets, realizing the expected growth and fiscal dividend from the GST, and continuing the integration into the global economy.