World Bank retains India's growth rate for FY19-20 at 7.5 per cent
Washington: India's economy is projected to grow at 7.5 per cent in the next three years, supported by robust investment and private consumption, the World Bank has forecast, in some good news to the new Indian government.
The bank in its Global Economic Prospects released Tuesday said that India is estimated to have grown 7.2 per cent in fiscal year 2018/19, which ended March 31.
A slowdown in government consumption was offset by solid investment, which benefitted from public infrastructure spending.
As against a growth rate of 6.6 per cent in 2018, China's growth rate in 2019 is projected to be dropped to 6.2 per cent and then subsequently to 6.1 per cent in 2020 and 6 per cent in 2021, the World Bank said.
With this, India will continue to retain the position of being the fastest growing emerging economy. And by 2021, its growth rate is projected to be 1.5 per cent more than China's 6 per cent.
The World Bank's report came as a good news for India days after Data from Central Statistics Office (CSO) showed that India's economic growth slowed to a five-year low of 5.8 per cent in fourth quarter of 2018-19, pushing the country behind China.
The decline in the economic activity has been attributed by the CSO to steep decline in growth in agriculture and manufacturing sectors.
According to the World Bank, growth in India is projected at 7.5 per cent in Fiscal Year 2019/20 (April 1, 2019 to March 31, 2020), unchanged from the previous forecast, and to stay at this pace through the next two fiscal years.
"Private consumption and investment will benefit from strengthening credit growth amid more accommodative monetary policy, with inflation having fallen below the Reserve Bank of India's target, it said.
Support from delays in planned fiscal consolidation at the central level should partially offset the effects of political uncertainty around elections in FY2018/19, it said.
The World Bank said that India's urban consumption was supported by a pickup in credit growth, whereas rural consumption was hindered by soft agricultural prices.
On the production side, robust growth was broad-based, with a slight moderation in services and agricultural activity accompanied by an acceleration in the industrial sector. Weakening agricultural production reflected subdued harvest in major crops on the back of less rainfalls, it said.
Services activity softened mainly due to slowing trade, hotel, transport, and communication activity. The industrial sector benefited from strong manufacturing and construction with solid demand for capital goods. The slowing momentum in economic activity in late 2018 carried into the first quarter of 2019, as suggested by softening services and manufacturing Purchasing Managers' Indexes, the report said.
Observing that the new Goods and Services Tax regime is still in the process of being fully established, creating some uncertainty about the projections of government revenues, the report said fiscal deficits continue to exceed official targets in some countries -- India, Pakistan.
The World Bank's report came as New Finance Minister Nirmala Sitharaman is set to present the first budget of the Narendra Modi 2.0 government on July 5. The former defence minister, who inherits a fractured economy, is expected to accelerate the reform process.
In her budget, 59-year-old Sitharaman will have to address slowing economy, financial sector troubles like rising Non-performing Assets and liquidity crisis in non banking financial companies, job creation, private investments, exports revival, agrarian crisis and raise public investment without compromising on fiscal prudence.
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Israel launches first airstrike on Lebanon since ceasefire, accusing Hezbollah of breaching truce
Beirut, Nov 28: The Israeli military on Thursday said its warplanes fired on southern Lebanon after detecting Hezbollah activity at a rocket storage facility, the first Israeli airstrike a day after a ceasefire between Israel and Hezbollah took hold.
There was no immediate word on casualties from Israel's aerial attack, which came hours after the Israeli military said it fired on people trying to return to certain areas in southern Lebanon. Israel said they were violating the ceasefire agreement, without providing details. Lebanon's state-run National News Agency said two people were wounded.
The back-to-back incidents stirred unease about the agreement, brokered by the United States and France, which includes an initial two-month ceasefire in which Hezbollah members are to withdraw north of the Litani River and Israeli forces are to return to their side of the border. The buffer zone would be patrolled by Lebanese troops and UN peacekeepers.
On Thursday, the second day of a ceasefire after more than a year of bloody conflict between Israel and Hezbollah, Lebanon's state news agency reported that Israeli fire targeted civilians in Markaba, close to the border, without providing further details. Israel said it fired artillery in three other locations near the border. There were no immediate reports of casualties.
An Associated Press reporter in northern Israel near the border heard Israeli drones buzzing overhead and the sound of artillery strikes from the Lebanese side.
The Israeli military said in a statement that “several suspects were identified arriving with vehicles to a number of areas in southern Lebanon, breaching the conditions of the ceasefire.” It said troops “opened fire toward them” and would “actively enforce violations of the ceasefire agreement.”
Israeli officials have said forces will be withdrawn gradually as it ensures that the agreement is being enforced. Israel has warned people not to return to areas where troops are deployed, and says it reserves the right to strike Hezbollah if it violates the terms of the truce.
A Lebanese military official said Lebanese troops would gradually deploy in the south as Israeli troops withdraw. The official spoke on condition of anonymity because they were not authorized to brief media.
The ceasefire agreement announced late Tuesday ended 14 months of conflict between Israel and Hezbollah that began a day after Hamas' Oct. 7, 2023 attack out of Gaza, when the Lebanese Hezbollah group began firing rockets, drones and missiles in solidarity.
Israel retaliated with airstrikes, and the conflict steadily intensified for nearly a year before boiling over into all-out war in mid-September. The war in Gaza is still raging with no end in sight.
More than 3,760 people were killed by Israeli fire in Lebanon during the conflict, many of them civilians, according to Lebanese health officials. The fighting killed more than 70 people in Israel — over half of them civilians — as well as dozens of Israeli soldiers fighting in southern Lebanon.
Some 1.2 million people were displaced in Lebanon, and thousands began streaming back to their homes on Wednesday despite warnings from the Lebanese military and the Israeli army to stay out of certain areas. Some 50,000 people were displaced on the Israeli side, but few have returned and the communities near the northern border are still largely deserted.
In Menara, an Israeli community on the border with views into Lebanon, around three quarters of homes are damaged, some with collapsed roofs and burnt-out interiors. A few residents could be seen gathering their belongings on Thursday before leaving again.
