World Bank pares India GDP growth to 6%

The World Bank revised its growth forecast for the Indian economy in 2013-14 to 6.1%, lower than its 7% estimate six months ago. The drop came at the back of lower agricultural growth at 2% instead of the previous 2.7%, even though the country is expecting normal monsoon.

On Tuesday, the World Bank said  the Indian economy would slowly recover to high long-term growth as the economy comes back on track due to strong domestic demand, vibrant savings and investments.

“Growth projections for 2013-14 has been arrived at by taking into account present internal and external factors.

Economic growth is likely to accelerate to over 6% during the current financial year.

Growth is expected to increase to 6.7% in 2014-2015... Recent data point to some improvements in economic activity: inflation and trade deficit came down in recent months, while private consumption and investment growth had accelerated in the third quarter of 2012-2013,” Denis Medvedev, Senior Country Economist, World Bank, India said.

The International Monetary Fund had stated in its release on Monday that the country’s GDP would increase to 5.7%  in the year ending December, 2013 and then move to 6.2%  a year later. The Prime Minister’s Economic Advisory Council has projected an economic growth of 6.4% for the ongoing financial year.

“Despite the current downturn, long term prospects remain bright for India. India possesses the fundamentals to grow at sustained high rates over the next several decades... The long-term prospects for India is bright...We certainly see possibility of 8% growth going forward,” Martin Rama, World Bank’s Chief Economist for South Asia said.