The International Monetary Fund (IMF) has predicted that World’s economy will grow only at 3.9 % in 2019.However India, as per them, is set to grow at 7.8 per cent in 2019. These predictions have been made in a report prepared by the World Bank titled: ‘Global Economic Prospects: Darkening Skies’. The report says that most world economies stare at dark times in this financial year. However, it has projected a brighter picture for India.
The IMF report speaks of various factors that are influencing growth or being an impediment. On South Asia segment, the World Bank has expressed positive momentum stating that
“Economic activity in South Asia has improved markedly since mid-2017 and continued to gain strength in early 2018, reflecting improved consumer and investor sentiment and stronger investment… India’s GDP has improved significantly since the middle of last year and has carried momentum into 2018 thanks to a recovery in investment”. India is all set to lead in economic resurgence of not only South Asia but even the World.
As per World Bank forecast India will continue to remain the fastest growing economy in the world even in 2019-20. In a report that was released on 08 January the World Bank that India’s Gross domestic Product (GDP) will grow at 7.8 % during the ongoing financial year. In comparison, China is expected to register a much lower growth rate of 6.3 % only.
The World Bank report said, “In India the recent introduction of a GST and steps toward demonetisation are expected to encourage a shift from the informal to the formal sector.” Following have been emphasised in the report :
(a) India’s GDP will climb to 7.8% per cent in next financial year as a result of increased consumption and investment. Besides, it says that the economy is regaining rapidly after a temporary slowdown due to demonetisation and implementation of GST.
(b) In comparison China’s economic growth will slow down to 6.2 in 2019.
(c) Indian growth has accelerated, driven by an upswing in consumption, and investment growth but rising interest rates and currency volatility are weighing factors.
(d) The World Bank report said that the introduction of the GST and demonetisation have encouraged a shift from the informal to the formal sector.
(e) Meanwhile, growth among advanced economies is likely to drop to 2 per cent this year.
(f) Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies. Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2 percent this year.
(g) Of all the regional blocs, South Asia is expected to accelerate to a growth of 7.1 per cent in 2019, underpinned by strengthening investment and robust consumption, with much of the contribution coming in from India.
(h) Growth in Pakistan is anticipated to slow to 3.7 percent in 2018-19 as financial conditions tighten in the face of rising inflation and external vulnerabilities.
(i) Bangladesh is expected to register a growth of 7 per cent in 2018-19. The World Bank forecasts as growth of 4 per cent for Sri Lanka, and 5.9 per cent for Nepal.
(j) The upcoming election to Lok Sabha in India next year elevates political uncertainty in the region. A wrong political environment could adversely affect the ongoing reform agenda and economic activity.
