India’s economy is likely to grow 7.3% in 2018 and then accelerate to 7.5% in the next two years, the World Bank said on Tuesday, citing strong consumption in the private sector and public spending.
The World Bank estimated a slower growth of 6.7% in Gross Domestic Product during the 2017-’18 financial year, which it said was “due in part to the effects of the introduction of the Goods and Services Tax”.
This is slightly higher than the government’s projection for 2017-’18. On Friday, the Central Statistical Office, in its first advance estimate, pegged a GDP growth of 6.5% in the financial year, lower than 7.1% in 2016-’17.
In the coming years, the private sector will adjust to the changes in the tax structure, and a broad recovery in global trade will boost Indian exports, the World Bank’s 2018 Global Economics Prospect report said. This, it added, will lift the economy again.
“In all likelihood, India is going to register higher growth rate than other major emerging market economies in the next decade,” Ayhan Kose, director of the World Bank’s Development Prospects Group, told PTI. “So I wouldn’t focus on the short-term numbers. I would look at the big picture for India, and the big picture is telling us that it has enormous potential.”
China’s economy is slowing, and in comparison, the World Bank expects India to gradually accelerate, Kose, the author of the report, said. He said India had a favourable demographic profile, but it needed to have more women in its labour force and reduce unemployment among youth.