After India, Bangladesh is projected to be the fastest-growing economy in South Asia with growth rates of seven per cent for 2018 and 2019Washington DC: The International Monetary Fund's (IMF) Asia and Pacific Regional Economic Outlook reaffirmed on Wednesday that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 per cent and further to 7.8 per cent in FY 2019. The report emphasized that India was recovering from the effects of demonetisation, the introduction of the Goods and Services Tax and that "the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption." However, it added a note of caution: "In India, given increased inflation pressure, monetary policy should maintain a tightening bias."
Medium-term consumer price index inflation is forecast to remain static but closer to the upper bound of the Reserve Bank of India's inflation-targeting band of four per cent with a plus or minus two per cent change. Consumer price increase in 2017 was 3.6 per cent and projected it to be five per cent both in 2018 and 2019. The report said that "the current account deficit in fiscal year 2017-18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows,".
Asian region alone contributes more than 60 per cent of global growth and three-quarters of this comes from India and China, which is expected to grow by 6.6 per cent in 2018 and 6.4 per cent in 2019. After India, Bangladesh is projected to be the fastest-growing economy in South Asia with growth rates of seven per cent for 2018 and 2019; Sri Lanka is projected to grow at four per cent in 2018 and 4.5 in 2019, and Nepal five per cent in 2018 and four per cent in next. (Pakistan, which is grouped with the Middle East, is not covered in the Asia report.) The report also said that Asia continues to be both, the fastest-growing region in the world as well as the main engine of the world's economy.
However, in the medium term the report said that "downside risks dominate" for the region and these include a tightening of global financial conditions, a shift toward protectionist policies, and an increase in geopolitical tensions.
Read: Latest Business News | Plea to give special focus for export promotion of rubber, tea, coffee
