WB pegs India growth at 7.5% for FY11
Financial Express, February 2, 2010, Page 2
fe Bureaus, New Delhi
The World Bank added to the rising chorus of expectations of growth rates about the Indian economy, post the global economic slowdown. In its estimate for the year 2010-11 the bank said the Indian economy is likely to grow at 7.5 % next fiscal and the growth prospects remain strong, despite “muted recovery (that) will take several years to undo the damage”.
The Bank’s annual Global Economic Prospects 2010 released on Monday, said India “is expected to grow at 7.5-8 % in 2010-11 and 2011-12, respectively, well above the 6.4 % average posted during 1995-2005”. RBI has already estimated growth in India at 7.5% for 2009-10. This comes at a time when the global recovery remains fragile and is expected to slow later this year as the impact of the fiscal stimulus measures wanes, it said.
Explaining the reasons for the growth of the economy, it says “India’s growth will benefit from the firming (up of) external demand, particularly resumption of growth in high-income countries”.
Foreign direct investment inflows to the country are expected to increase in 2010, the report said, adding this will be on the back of the recovery of the overall investment into the developing countries this year and as New Delhi improves its FDI policies.
The author of the report, Hans Timmer, who is the director of the World Bank Prospects Group said “India weathered the global crisis relatively well, in part due to the government’s quick response in easing monetary policy and counter-cyclical fiscal policy measures that supported domestic demand”. According to him the key challenge for the economy will be how successful it is in reducing its large fiscal deficit. “As private consumption gains momentum, India’s import volumes are likely to expand ..translating into a deterioration in the current account balance”. Incidentally for the current fiscal, the Bank had projected only a 6 % rate. Timmer said, the report was “not written yesterday. We just had the first quarter growth figures (6.1 %) when the report was written.”
Financial Express, February 2, 2010, Page 2
fe Bureaus, New Delhi
The World Bank added to the rising chorus of expectations of growth rates about the Indian economy, post the global economic slowdown. In its estimate for the year 2010-11 the bank said the Indian economy is likely to grow at 7.5 % next fiscal and the growth prospects remain strong, despite “muted recovery (that) will take several years to undo the damage”.
The Bank’s annual Global Economic Prospects 2010 released on Monday, said India “is expected to grow at 7.5-8 % in 2010-11 and 2011-12, respectively, well above the 6.4 % average posted during 1995-2005”. RBI has already estimated growth in India at 7.5% for 2009-10. This comes at a time when the global recovery remains fragile and is expected to slow later this year as the impact of the fiscal stimulus measures wanes, it said.
Explaining the reasons for the growth of the economy, it says “India’s growth will benefit from the firming (up of) external demand, particularly resumption of growth in high-income countries”.
Foreign direct investment inflows to the country are expected to increase in 2010, the report said, adding this will be on the back of the recovery of the overall investment into the developing countries this year and as New Delhi improves its FDI policies.
The author of the report, Hans Timmer, who is the director of the World Bank Prospects Group said “India weathered the global crisis relatively well, in part due to the government’s quick response in easing monetary policy and counter-cyclical fiscal policy measures that supported domestic demand”. According to him the key challenge for the economy will be how successful it is in reducing its large fiscal deficit. “As private consumption gains momentum, India’s import volumes are likely to expand ..translating into a deterioration in the current account balance”. Incidentally for the current fiscal, the Bank had projected only a 6 % rate. Timmer said, the report was “not written yesterday. We just had the first quarter growth figures (6.1 %) when the report was written.”
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