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World Bank forecasts India's GDP growth at 7.3% for FY19

With investment picking up and consumption remaining strong, the World Bank has forecasted that Indian economy is expected to grow at 7.3% in the current fiscal year 2018-19 (FY19) and will grow further at average 7.5% in the following two years. It also said that India registered quite a bit of pick up in doing business ranking. It added that the country's growth outlook is still robust and will continue to be the fastest growing major economy in the world.

According to the January 2019 Global Economic Prospects report of World Bank, the growth in India has accelerated driven by an upswing in consumption, and investment growth has firmed as the effects of temporary factors wane. Domestic demand has strengthened as the benefits of structural reforms such as the Goods and Services Tax (GST) harmonisation and bank recapitalisation take effect. It further said private consumption is projected to remain robust and investment growth is expected to continue as the benefits of recent policy reforms begin to materialise and credit rebounds.

The report also said that strong domestic demand is envisioned to widen the current account deficit of 2.6% of GDP next year. Inflation is projected to rise somewhat above the midpoint of Reserve Bank of India's range of 2-6%, mainly owing to energy and food prices. It said in India the recent introduction of the GST and steps toward demonetisation are expected to encourage a shift from the informal to the formal sector. It noted that growth performance of India as compared to other emerging markets has been quite impressive and year after year it has delivered strong numbers around its potential growth.

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