The World Bank has retained its forecast of India’s growth rate at 7.5% for the current financial year. In its Global Economic Prospects report, the World Bank also said growth rate is expected to remain the same for the next two fiscals. According to the report, private consumption and investment will benefit from strengthening credit growth amid more accommodative monetary policy, with inflation having fallen below the Reserve Bank of India’s target. Support from delays in planned fiscal consolidation at the central level should partially offset the effects of political uncertainty around elections, it added.
The World Bank, in its report, observed that the main domestic risks to the outlook include a re-escalation of political turbulence amid elections in some countries (Afghanistan, Sri Lanka); fiscal slippages with expanding public spending; and a resurgence of non-bank financial sector funding issues.
Another factor accounted for by the World Bank is uncertainty about the Brexit process, which possesses the ability to create a risk to some South Asian economies which have preferential trade agreements or generalised system of preferences with the European Union and significant exports to the United Kingdom, including India, Bangladesh, Pakistan, and Sri Lanka.
- The World Bank is an international financial institution that provides loans to countries for the purpose of pursuing capital projects.
- It comprises two institutions: the International Bank for Reconstruction and Development, and the International Development Association.
- Headquarters: Washington, D.C., United States
- Membership: 189 countries