The World Bank released its report on global economic prospects on Wednesday. The report looks at the growth trajectory of different countries for the year 2018. In good news for the country, India had a strong come back with the World Bank expecting its growth to accelerate at 7.3 per cent in 2018.
The report also estimated that India can touch a growth rate of 7.5 per cent in the coming two years. Despite setbacks from demonetisation and the recently launched, Goods an Services Tax, India is expected to maintain a growth rate of 6.7 per cent in 2017. The report revised the growth rate for 2017 from earlier expected 7 per cent tpo 6.7 per cent.
The World Bank expects India to outdo other emerging markets in the coming years. On the other hand, China’s growth estimates were shown to slow down in the year 2018. China is currently growing at a rate of 6.8 per cent. The report suggests that the Chinese growth might come down to 6.4 per cent in 2018.
It is important to note that both the countries have a different evaluation time for these numbers. Where India’s fiscal year starts from April and ends in March, China’s financial year goes from January to December.
The document released by the World Bank said that India’s growth trajectory will be positively impacted by strong services industry and consumption. Both the sectors are expected to support the economic activity.
The report read, “Private investment is expected to revive as the corporate sector adjusts to the GST; infrastructure spending increases, partly to improve public services and internet connectivity; and private sector balance sheet weaknesses are mitigated with the help of the efforts of the government and the Reserve Bank of India.”
The report also said that the Goods and Services Taxes is going to benefit the economic activity in the midterm. The report suggested that the GST will help bring the informal sector to the formal fold and that will help the country’s economy.
The document also stressed on the bank recapitalisation move by the Government of India. The release by the World Bank read, “The recent recapitalization package for public sector banks announced by the Government of India is expected to help resolve banking sector balance sheets, support credit to the private sector, and lift investment. The global trade recovery is expected to lift exports.”
This is the second great push for Indian economy from an international forum in less than two months. Earlier, Moody’s had upgraded India’s rating after 14 long years.
