The World Bank on Tuesday forecast that the Indian economy would grow at 7.5% this fiscal year and that growth is poised to accelerate as policy changes gather momentum.
“While data constraints make it difficult to estimate potential gross domestic product with precision, we estimate potential growth to nearly converge to 8% by 2017-18 from around 7% in 2013-14 assuming both a meaningful and sustainable pick up in investment, as well as a pick up in productivity growth,” the World Bank said in a report, NewsNow reported.
In February, the government projected the economy would grow 7.4% in the fiscal year ended March 31, much higher than the 5.5% growth that most policy makers had been expecting.
The revision was due to updates in the base year and incorporation of new data. The sharply higher forecast raised doubts about the reliability of the new data as they presented a much more rosy picture of the economy than several other indicators, such as industrial production and exports, seemed to suggest.
Nevertheless, economists broadly agree that the Indian economy is improving.
The World Bank said India’s economy has seen a remarkable turnaround over the past year, with most economic indicators, such as fiscal deficit, current-account deficit and foreign exchange reserves, showing significant improvement.
The inflation outlook also remains benign, based on expectations that global food and oil prices remain low, it added.
