India standing bright in global economy; World Bank forecasts growth at 7.3% in 2018

Washington, January 10: The World Bank today having projected India's growth rate to 7.3% for 2018 stated that the nation has a prospective future. It also added that the growth rate would progress further to 7.5% in the coming 2 years.

India, despite initial setbacks from demonetisation and Goods and Services Tax (GST), is estimated to have grown at 6.7 percent in 2017, according to the 2018 Global Economics Prospect released by the World Bank.

“In all likelihood India is going to register higher growth rate than other major emerging market economies in the next decade. So, I wouldn’t focus on the short-term numbers. I would look at the big picture for India and big picture is telling us that it has enormous potential,” said Ayhan Kose, Director, Development Prospects Group, World Bank.

He said in comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate. “The growth numbers of the past three years were very healthy,” Kose, author of the report, said.

In 2017, China grew at 6.8 percent, 0.1 percent more than that of India, while in 2018, its growth rate is projected at 6.4 percent. And in the next two years, the country’s growth rate will drop marginally to 6.3 and 6.2 percent, respectively.

To materialise its potential, India, Kose said, needs to take steps to boost investment prospects. There are measures underway to do in terms of non-performing loans and productivity, he said.

“On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India’s prospects,” Kose said.

Noting that India has a favourable demographic profile, he said it is rarely seen in other economies. He said that the India’s growth potential would be around 7 percent for the next 10 years.

The Indian government is “very serious” with GST being a major turning point and banking recapitalisation programme is really important, Kose said.