India to grow at 7.5% in FY 20: World BankDate: 06 June 2019 Tags: Basics of Economics
According to recently released World Bank’s Global Economic Prospects, India is projected to grow at 7.5% in the next three years supported by robust investment and private consumption. With this India will continue to retain position of being the fastest growing emerging economy in the world.
Key Highlights of report
- China’s growth rate: It was 6.6% in 2018.In in 2019, it is projected to be dropped to 6.2% and then subsequently to 6.1% in 2020 and 6% in 2021. Whereas India’s growth by 2021 is projected to be 1.5% more than China’s 6% .
- India’s Growth: India is estimated to have grown 7.2% in fiscal year (FY) 2018/19, which ended March 2019. Slowdown in government consumption will be offseted by solid investment, which benefitted from public infrastructure spending.
- It is projected at 7.5% in Fiscal Year 2019/20 (April 1, 2019 to March 31, 2020), unchanged from the previous forecast, and to stay at this pace through the next two fiscal years.
- Private consumption and investment will benefit from strengthening credit growth amid more accommodative monetary policy, with inflation having fallen below RBI’s target.
- India’s urban consumption was supported by pickup in credit growth, whereas rural consumption was hindered by soft agricultural prices.
- On production side, robust growth was broad-based, but there was slight moderation in services and agricultural activity accompanied by acceleration in industrial sector.
- Weakening agricultural production reflected subdued harvest in major crops on the back of less rainfalls.
- Services activity has softened mainly due to slowing trade, hotel, transport, and communication activity. Industrial sector will be benefited from strong construction and manufacturing with solid demand for capital goods.