The World Bank has projected India’s economic growth to accelerate to 7.3% in FY19 and 7.5% in 2019-20.
- The World Bank India report, however, observed that a GDP growth of over 8% will require a continued reform and a widening of their scope.
Key facts
- It said that India’s GDP growth rate will return to 7.5% in two years’ time.
- In order to sustain an 8% GDP growth rate, India requires a decisive structural reform momentum that succeeds in stimulating investment and export growth while maintaining macroeconomic stability.
- The only durable episode of growth sustaining at levels above 8% for five continuous years is the one which lasted from 2004 to 2008, with the average growth rate reaching an unprecedented high of 8.8% a year.
- The World Bank, in its twice-a-year South Asia Economic Focus report stated that the growth is expected to accelerate from 6.7% in 2017 to 7.3% in 2018.
- The growth will be subsequently stabilised supported by a sustained recovery in private investment and private consumption.
- The World Bank noted that the country's economy has recovered from the effects of demonetisation and the Goods and Services Tax.
- It acknowledged that disruptions from demonetisation and events surrounding the implementation of GST led to a setback in economic activity and a potentially larger negative effect on the poor and vulnerable.
- It further stated that every month, the work force increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015, largely due to women leaving the job market.
About World Bank
The World Bank is an international financial institution that provides loans to countries of the world for capital projects. It was formed in July 1945 with a goal “reduction of poverty”. With 189 member countries, staff from more than 170 countries and offices in over 130 locations, the World Bank Group is a unique global partnership of five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. Its main objective is to end extreme poverty and to promote shared prosperity. The five institutions of the World Bank Group are –- IBRD (International Bank for Reconstruction & Development)
- IDA (International Development Association)
- IFC (International Finance Corporation)
- MIGA (Multilateral Investment Guarantee Agency)
- ICSID (International Centre for Settlement of Investments Disputes)
