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India to remain bright spot of global economy: World Bank

business Updated: Jan 07, 2016 23:43 IST
India

India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8% in fiscal 2016-17(File photo)

India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8% in fiscal 2016-17, more than a percentage point higher than China’s, according to the World Bank.

In its latest Global Economic Prospect report -- which is released every six months -- the World Bank marginally reduced India’s growth rate – 0.2% in 2015 and 0.1% in both 2016 and 2017.

However, India continues to be the bright spot of the global economy as Chinese growth is projected to slow further.

India, the dominant economy in Asia, is projected to grow by a robust 7.8% this year and 7.9% in the next two years.

The World Bank estimates that China grew at an estimated 6.9% in 2015 (0.3% less than its June projection).

According to the report, China is estimated to grow at 6.7% in 2016 and 6.5% each in 2017 and 2018.

The growth rate projections is 0.3% in 2016 and 0.4% in 2017. Russia and Brazil are expected to remain in recession in 2016.

“In contrast to other major developing countries, growth in India remained robust, buoyed by strong investor sentiment and the positive effect on real incomes of the recent fall in oil prices,” the World Bank said.

India’s currency and stock markets were largely resilient over the past year, even during bouts of volatility in global financial markets, the report said.

Reserve Bank of India, it said, has rebuilt reserves while net FDI flows have remained positive.

Ongoing fiscal consolidation in India has reduced the central government’s fiscal deficit to close to 4% of GDP (on a 12-month rolling basis), down from a peak of 7.6% in 2009.

In the report, South Asia is projected to be a bright spot in the outlook for emerging and developing economies, with growth speeding up to 7.3% in 2016 from 7% in the year just ended.

The region has smaller trade links with China than other regions, and is a net importer of oil and will benefit from lower global energy prices.

Pakistan (on a factor cost basis) is expected to accelerate to 4.5%, the report said.