The World Bank on Sunday forecast a fall in the growth rates of India and Pakistan for the current fiscal year.
India’s gross domestic product (GDP) growth rate is expected to fall to 6 percent, down from 6.9 percent last year. However, growth will gradually recover to 6.9 percent in fiscal year 2020 - 2021 and to 7.2 percent in the following year, estimated World Bank.
A slowing manufacturing sector and lower consumption have hit India’s economy hard. This has been exacerbated by ongoing trade-tensions and slowdowns in other major economies. India’s central bank recently cut its GDP growth estimates for FY 2019-2020 to 6.1 percent, from its previous forecast of 6.9 percent.
Pakistan’s economy will deteriorate further to 2.4 percent this fiscal year, estimates World Bank, which expects the country’s tight monetary policy and planned fiscal consolidation to compress domestic demand.
Pakistan's economy grew at a rate of 3.3 percent in fiscal year 2018-19.
A program the country signed with the International Monetary Fund (IMF) is expected to help growth recover from fiscal year 2021-22 onwards, the global lender said in its report.
Earlier this year, the IMF approved a three-year, $6 billion loan package for Pakistan, providing much needed relief to its debt-saddled economy.
Overall, the World Bank expects growth to slow in South Asia in line with the current global downward trend.
“Growth in South Asia is projected to slow to 5.9 percent in 2019, down 1.1 percentage points from April 2019 estimates, casting uncertainty about a rebound in the short term,” said the World Bank in its twice-a-year regional economic update.