India's GDP is expected to grow at 7.3 per cent in the fiscal year 2018-19, and 7.5 per cent in the following two years, the World Bank has forecast, attributing it to an upswing in consumption and investment. The bank said India will continue to be the fastest growing major economy in the world. China's economic growth is projected to slow down to 6.2 each in 2019 and 2020 and 6 per cent in 2021, according to the January 2019 Global Economic Prospects report released by the World Bank on Tuesday. In 2018, the Chinese economy is estimated to have grown by 6.5 per cent as against India's 7.3 per cent. In 2017, China with 6.9 per cent growth was marginally ahead of India's 6.7 per cent, mainly because the slowdown in the Indian economy due to demonetisation and implementation of the Goods and Services Tax (GST), the report said.
In India, the growth has accelerated, driven by an upswing in consumption, and investment growth has firmed as the effects of temporary factors wane, the World Bank said in its latest report. Domestic demand has strengthened as the benefits of structural reforms such as the Goods and Services Tax (GST) harmonisation and bank recapitalisation take effect. According to the report, India's GDP is forecast to grow by 7.3 per cent in FY2018/19 and 7.5 per cent thereafter, in line with June forecasts. Private consumption is projected to remain robust and investment growth is expected to continue as the benefits of recent policy reforms begin to materialise and credit rebounds. It said in India the recent introduction of the GST and steps toward demonetisation are expected to encourage a shift from the informal to the formal sector.
The World Bank's estimate suggest that India's potential growth rate is around seven per cent, and is expected to remain around seven per cent, he said in response to a question. "The fact is that Indian economy is being able to deliver growth slightly above its potential is a very good sign, he added. Refraining from commenting on the economic performance of the Modi Government that too in an election year, the World Bank official said growth performance of India as compared to other emerging markets has been quite impressive. "India's growth performance has been quite impressive. Year after year it has delivered strong numbers around its potential growth," he said.