India to grow 7.3% in 2018, fastest across Asia: Asian Development Bank

  • According to Asian Development Bank’s (ADB) latest Asian Development Outlook (ADO) 2018 report, India is expected to be the fastest growing economy in Asia in 2018-19FY.
  • As per the report, India will reverse two years of declining growth to clock 7.3 per cent rise in GDP in the current fiscal and further accelerate to 7.6 per cent in FY20.
  • The dip in growth to 6.6 per cent in FY17 was in part due to the lingering effects of demonetisation that impacted the informal sector in the first half of FY17 and teething issues related to implementation of the goods and services tax (GST).
  • According to India’s official estimates, the economy picked up pace to 7.2 per cent in October-December 2017 quarter from 6.5 per cent in July-September quarter and 5.7 per cent in April-June quarter. For the entire FY18, the economy is expected to grow 6.6 per cent. .
  • Asian Development Bank expects various reforms measures to lift growth. Robust foreign direct investment flows attracted by liberalized regulations and the government’s steps to improve the ease of doing business will further bolster growth.”
  • India’s growth will get support from measures to bolster farmers’ purchasing power through higher procurement prices, agriculture market reforms and investments in irrigation and logistics, the Manila based bank said.
  • Inflation is forecast to rise to 4.6 per cent in FY18 and 5 per cent in FY19 due to firmer global commodity prices and stronger domestic demand.
  • A pick-up in growth in advanced economies will likely help exports grow at a healthy rate, but the Asian Development Bank added that though protectionist trade measures by the United States are yet to impact trade, they pose a risk.
  • China is forecast to slow down from 6.9 per cent in 2017 to 6.6 per cent this year and further 6.4 per cent in 2019.
  • The World Bank last month projected India’s economic growth to accelerate to 7.3% in 2018-19 and 7.5% in 2019-20.
  • The Reserve Bank of India expects 7.4 per cent growth in FY19.

Source: Livemint

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