World Bank has predicted that India will maintain its tag of being the fastest growing economy in the world in the coming financial year of 2019-2020. Driven by continued investment strengthening, particularly private-improved export performance and resilient consumption, India’s GDP growth is expected to accelerate moderately to 7.5 percent in the fiscal year 2019-20, as per the report of the World Bank.
Data for the first three quarters suggest that growth has been broad-based. Industrial growth accelerated to 7.9 percent, making up for a deceleration in services. During the financial year 2018-19, the real GDP growth is estimated at 7.2 percent.
With robust growth, and food prices poised to recover, inflation is expected to converge toward 4 percent, it said, adding that both the current account and the fiscal deficit are expected to narrow. “On the external front, improvements in India’s export performance and low oil prices should bring about a reduction in the current account deficit to 1.9 percent of GDP,” it said.
“On the internal front, the consolidated fiscal deficit is projected to decline, albeit slowly (to 6.2 and 6.0 percent of GDP in FY19/20 and FY20/21 respectively). As the center’s deficit is budgeted to remain unchanged at 3.4 percent of GDP in FY19/20, the burden of adjustment will rest on the states, the World Bank said.
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