World Bank: India’s Economy Ticking Upward
May. 2 – The World Bank recently released the latest edition of its India Development Update, which states that the Indian economy is trending upwards and would likely grow by 6.1 percent in 2013 thanks to the country’s robust domestic demand, strong savings and good investment rates of return.
Martin Rama, the World Bank’s Chief Economist for South Asia, expressed hope.
“Despite the current downturn, long-term prospects remain bright for India. India possesses the fundamentals to grow at sustained high rates over the next several decades,” he said.
In recent months, India’s wholesale price index-based inflation and trade deficit have declined, with inflation falling below 6 percent. Inflation is expected to decline even further thanks to expectations regarding the rupee and a good monsoon season. India’s current account deficit, which reached a record high of 6.7 percent during the fourth quarter of 2012, is also expected to narrow.
Prime Minister Manmohan Singh has already undertaken several steps to boost economic activities in order to attract overseas capital by easing foreign investment restrictions in retail and civil aviation and establishing a panel to clear large industrial projects.
“Economic growth is likely to accelerate to over 6 percent during the current financial year (April 2013-March 2014)…and is expected to increase further to 6.7 percent in 2014-2015, ” said Denis Medvedev, a senior country economist with the World Bank. “Recent data point to some improvements in economic activity; both inflation and the trade deficit came down in recent months, while private consumption and investment growth had accelerated in the third quarter of 2012-2013.”
The Indian economy previously expanded at an annual rate of about 9 percent prior to the 2008 global financial crisis. For comparison, India’s gross domestic product (GDP) is estimated to have expanded by only 5 percent in the fiscal year that ended on March 31, the slowest growth rate in over a decade.
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