NEW DELHI: The World Bank expects India’s economy to expand at 7.2 per cent this fiscal, but said that the note ban temporarily disrupted growth last fiscal, which slowed to an estimated 6.8 per cent.
“India’s economy was slowing down in early 2016-17, until the favourable monsoon started lifting the economy, but the recovery was temporarily disrupted by the government’s ‘demonetisation’ initiative,” it said in its India Development Update released recently.
The report comes ahead of the release of provisional estimates of national income for 2016-17 by the Central Statistics Office (CSO) on May 31. The CSO, in its advance estimates, had pegged GDP growth at 7.1 per cent in 2016-17.
The World Bank had in January scaled down India’s growth forecast to 7 per cent for 2016-17 and had estimated growth to rebound in 2017-18 to 7.6 per cent.
However, it expects the economy to recover gradually and growth to increase to 7.7 per cent in 2019-2020.
“India remains the fastest growing economy in the world and it will get a big boost from its approach to the goods and services tax,” said Junaid Ahmad, World Bank Country Director in India.