indo-asian news service, Washington, April 14: The World Bank and the International Monetary Fund (IMF), also called the Bretton Woods twins, have forecast India’s growth to speed up to 7.5-8 per cent next fiscal, outpacing China, thanks to the reforms focus of Prime Minister Narendra Modi’s government.
In separate studies released Tuesday – South Asia Economic Focus by the World Bank and World Economic Outlook by the IMF – the two multilateral institutions also said India will benefit much from the investment-led growth, as also the recent dip in global crude prices.
“Growth in China is expected to decline to 6.8 per cent this year and 6.3 per cent in 2016,” said IMF, adding, “… India’s growth is expected to strengthen from 7.2 per cent last year to 7.5 per cent this year and next.”The World Bank’s projection on India was a tad better. “Growth is expected to accelerate to 7.5 per cent in fiscal 2015-16. It could reach 8 per cent in fiscal 2017-18 (and) on the back of significant acceleration of investment growth to 12 per cent during fiscal years 2016-18.”
The forecasts come against the backdrop of a host of agencies expressing renewed confidence on the Indian economy in recent weeks. Global ratings major Moody’s raised India’s sovereign rating outlook to positive from stable, while Fitch reaffirmed its stable outlook on India.
Similarly, the think-tank of rich nations, the Organisation for Economic Cooperation and Development (OECD), endorsed high growth prospects for India, even as the Asian Development Bank (ADB) said the country will grow at 7.8 per cent in 2015-16 and at 8.2 percent in 2016-17.
Both the World Bank and the IMF also had some advice for India. “It is also time … to turn to important structural reforms to raise productivity and growth in a lasting way,” the World Economic Outlook said. “Cheap oil gives the opportunity to rationalise energy prices, reducing the fiscal burden from subsidies and contributing to environmental sustainability”, said World Bank South Asia chief economist Martin Rama.