The WB’s latest edition of South Asia Economic Focus, Budget Crunch, has revealed that, prompted by the adoption of GST and the recapitalization of banks, growth in India is firming up and it is projected to accelerate further.

The growth is projected to rise to 7.3% in FY 2018/19, and to 7.5% in next 2 years, with stronger private spending and export growth as the key drivers.

It also revealed that the economy appears to have recovered from temporary disruptions caused by demonetization and introduction of GST. Growth reached 6.7% in FY17/18, with a significant acceleration in recent months. However, domestic risks and a less benign external environment impact the macroeconomic outlook.

The report credited a robust growth in second half for the turnaround, led by manufacturing sector (that grew at 8.8% vs. 2.7% in first half) and domestic consumption, which grew at 7%.

Agriculture growth also improved, and services growth held steady at 7.7%.

It also added that South Asia remains the fastest-growing region in the world and its performance has strengthened further, with growth rates exceeding 7% in Bangladesh, India and Maldives.

For more: https://openknowledge.worldbank.org/bitstream/handle/10986/30454/9781464813696.pdf