India to grow @ 7.8%: WB

The World Bank expects India's growth to pick up to 7.8% in the next financial year, projecting it to be the fastest growing economy in the world for the next three years by a distance, riding on stronger domestic policy reforms.
India is expected to notch near 8% growth in the subsequent years as the world economy also picks up pace to 2.9% growth in 2016 compared with a modest 2.4% in the just concluded year.
“South Asia will be a bright spot, reflecting improved conditions in India,“ the World Bank said in its flagship `Global Economic Prospects' released on Wednesday. The report pegs growth in the current year at 7.3%, same as last year while raising concerns over legislative reforms.
“In India, progress in reforms is not assured as the upper house of Parliament, which the ruling party does not control, has the power to block the government's legislative agenda,“ the report said, adding that the government has made progress in key areas such as energy and in November announced major reforms to liberalise foreign direct investment (FDI) in several sectors.
According to the report, weak growth among major emerging markets will weigh on global growth in 2016, but economic activity should still pick up modestly to a 2.9% pace, from 2.4% in 2015, as advanced economies gain speed.
Recognizing that the simultaneous weakness in most major emerging markets is a concern for achieving the goals of poverty reduction and shared prosperity, the report warned that the spillovers from major emerging markets will constrain growth in developing countries and pose a threat to hard-won gains in raising people out of poverty.
According to the report, developing economies are forecast to expand by 4.8% in 2016, less than expected earlier but up from a post-crisis low of 4.3% in the year just ended. “Growth is projected to slow further in China, while Russia and Brazil are expected to remain in recession in 2016. The recently negotiated Trans-Pacific Partnership could provide a welcome boost to trade,“ it said.
“There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy ,“ said World Bank Group vice-president and chief economist Kaushik Basu. “A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth.“

No comments: