Source: Economic Times
India is set to become the fastest-growing big economy in the world in the fourth year of Narendra Modi’s government, edging past China.
It’s set to clock a 7% rise in GDP in 2017 compared with 6.9% for bigger rival China, the World Bank said in its flagship publication, Global Economic Prospects, released on Tuesday.
India will recover to 6.4% in the current calendar year itself on the back of higher export growth and bolstered investor confidence with the election of a reform-minded government at the Centre, according to the report.
Global growth is expected to rise moderately to 3.0% in 2015 from 2.6% in 2014 and further increase to 3.3% in 2017, the report said, pointing out that there will be significant divergence in trends and that the “oil price collapse will result in winners and losers”.
It warned that risks to the outlook “remain tilted to the downside” because of weak global trade, financial market volatility as interest rates in major economies rise, strain on oil producers and a risk of prolonged stagflation or deflation in the euro area or Japan.”In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people, ” World Bank president Jim Yong Kim said in a statement.
“In India, export growth has been robust, and investor confidence has been bolstered by election of a reform-minded government. The current account deficit and elevated inflation—both persistent vulnerabilities—have declined considerably. Over the mediumterm, growth is expected to rise steadily to 7% as reforms begin to yield productivity gains. This is expected to benefit other countries in the region which receive remittances from India,” the World Bank said in its report.