- News>
- Economy
India to propel S-Asia GDP growth to 7.2% in 2004: World Bank
Washington, Apr 20: India`s robust economic growth is expected to push up growth in South Asia to 7.2 per cent in 2004, but high fiscal deficit and infrastructure bottleneck was coming in the way of sustaining such high growth, a World Bank report has said.
Washington, Apr 20: India's robust economic growth is expected to push up growth in South Asia to 7.2 per cent in 2004, but high fiscal deficit and infrastructure bottleneck
was coming in the way of sustaining such high growth, a World Bank report has said.
"Sustaining such high level of growth in future is possible. There are significant challenges. Infrastructure bottlenecks remain pervasive in the region. India remains
saddled with a large fiscal deficit," the 'global economic development finance 2004' report released by World Bank said.
"Recent tax cuts may raise the deficit further, especially if accompanied by populist spending in this election year," it warned.
World Bank, however, said "Continued reforms in India --including tax cuts early in 2004 and capital account liberalisation -- will contribute to future growth." Considering the high GDP growth of India in 2004, the report forecast that economic growth in South Asia is expected to be 7.2 per cent in 2004, boosted by it exports from India and the growing practice of outsourcing from OECD economies.
The South Asia GDP rise in 2003 was 6.5 per cent, a sharp pick-up from the 4.3 per cent registered in 2002, and is expected to touch 7.2 per cent in 2004, it said yesterday.
Peace talks between India and Pakistan, coupled with the regional trade initiatives of the South Asian Association for Regional Cooperation (SAARC) may further boost international confidence in the region, the report said. The smaller countries in the region will face difficulty from the impending phase-out of the international multi-fibre arrangement (MFA) in 2005, it said.
Bureau Report
"Recent tax cuts may raise the deficit further, especially if accompanied by populist spending in this election year," it warned.
World Bank, however, said "Continued reforms in India --including tax cuts early in 2004 and capital account liberalisation -- will contribute to future growth." Considering the high GDP growth of India in 2004, the report forecast that economic growth in South Asia is expected to be 7.2 per cent in 2004, boosted by it exports from India and the growing practice of outsourcing from OECD economies.
The South Asia GDP rise in 2003 was 6.5 per cent, a sharp pick-up from the 4.3 per cent registered in 2002, and is expected to touch 7.2 per cent in 2004, it said yesterday.
Peace talks between India and Pakistan, coupled with the regional trade initiatives of the South Asian Association for Regional Cooperation (SAARC) may further boost international confidence in the region, the report said. The smaller countries in the region will face difficulty from the impending phase-out of the international multi-fibre arrangement (MFA) in 2005, it said.
Bureau Report