WB notes India has recovered from demonetisation and GST, predicts 7.3% growth
New Delhi: The World Bank has noted that India now made a full recovery from the effects of demonetisation and GST which were introduced in the last two years. It further predicted a growth rate of 7.3 percent for the Indian economy in the financial year of 2019/20.
In its South Asia Economic Focus report, the World Bank stated that the Indian economy has recovered from demonetisation and GST – two factors blamed by several economists as reasons for stunting growth. The World Bank goes on to predict that India can now push forward its growth from 6.7 percent in 2017 to 7.3 percent. “India’s economy has recovered from the impact of the twin policy events – demonetization and GST. Growth is likely to stabilize and reach 7.5 percent by FY 19/20,” read the report.
The World Bank report does refer to both demonetisation and GST as crisis but states the worst is over.
The report then goes on to point out two major challenges still remaining. “First, private investment has been low compared to pre-crisis levels, driven by factors that constrain credit supply and investment opportunities. Second, exports have slowed and India’s share in world trade has stagnated. While external conditions seem to be turning more supportive of growth, India’s ability to leverage these will depend on a sustained revival of investments and exports.”