World Bank cuts India's growth projection to 6%

Washington DC: After a broad-based deceleration in the first quarters of this fiscal year, India's growth rate is projected to fall to 6 per cent, the World Bank said on Sunday.

In 2018-19, the growth rate of the country stood at 6.9 per cent.

However, the bank in its latest edition of the South Asia Economic Focus said the country was expected to recover to 6.9 per cent in 2021 gradually and 7.2 per cent in 2022 as it assumed that the monetary stance would remain accommodative, given benign price dynamics.

The report, which has been released ahead of the annual meeting of the World Bank with the International Monetary Fund, noted India's economic growth decelerated for the second consecutive year.

In 2018-19, it stood at 6.8 per cent, down from 7.2 per cent in the 2017-18 financial year.

While industrial output growth increased to 6.9 per cent due to a pick-up in manufacturing and construction activities, the growth in agriculture and the services sector moderated to 2.9 and 7.5 per cent, respectively. In the first quarter of 2019-20, the economy experienced a significant and broad-based growth deceleration with a sharp decline in private consumption on the demand side and the weakening of growth in both industry and services on the supply side, the report said.

The World Bank report also noted that the current account deficit had widened to 2.1 per cent of the GDP in 2018-19 from 1.8 per cent a year before, mostly reflecting a deteriorating trade balance.