Hopes of an economic rebound became stronger on Monday with the World Bank predicting that India’s gross domestic product (GDP) would grow by 8 per cent in 2010.
If achieved, it would make India the hottest growth economy in the world, better even than China that was forecast to grow at 7.7 per cent next year. The world economy was projected to grow at 2 per cent in 2010.
The data, which came in a report Global Development Finance 2009: Charting a Global Recovery, could fuel interest in India among foreign investors.
“Foreign direct investment inflows to India doubled, reflecting economic reforms in recent years and progress in opening up additional sectors for foreign investment,” the report said.
Latest domestic macroeconomic data has shown strong signs of a rebound. India’s industrial output showed 1.4 per cent growth in April, up from a 0.75 per cent contraction a month earlier.
“We may see more green shoots of recovery as fiscal and monetary stimulus have an impact,” said Manoj Vohra, Director, Research at Economist Intelligence Unit (EIU).