Washington, April 15: The World Bank's South Asia Economic Focus (SAEF) report released on Sunday predicted the subcontinent region to bounce back as the "fastest growing" in world, largely due to the resurging Indian economy.

The bi-annual report said India is inching towards "full recovery" from the twin shocks of demonetisation and the roll-out of Goods and Services Tax (GST), which proved to be a speed-breaker for the domestic market in the short run.

"The phase is now over", the report said, predicting a 7.3 per cent GDP growth in India in 2018, followed by 7.5 per cent in 2019 and 2020. "But the question is - can India do more," said the bank's chief economist Martin Rama.

Country-wise GDP growth registered and estimated (2015-20):

Real GDP growth in South Asia 2015 2016 2017 (est) 2018 (f) 2019 (f) 2020 (f)
Afghanistan (CY) 1.3 2.4 2.6 2.2 2.5 3.3
Bangladesh (FY) 6.6 7.1 7.3 6.5 6.7 7.0
Bhutan (FY) 7.3 7.4 5.8 5.4 6.0 8.7
India (FY) 8.2 7.1 6.7 7.3 7.5 7.5
Maldives (CY) 2.2 6.2 6.2 5.5 4.5 4.9
Nepal (FY) 3.3 0.4 7.5 4.6 4.5 4.2
Pakistan (FY, factor prices) 4.1 4.6 5.4 5.8 5.0 5.4
Sri Lanka (CY) 5.0 4.5 3.1 4.8 4.5 4.5

Rama recalled the period before demonetisation and GST when India was poised to touch the double digit growth mark. Claiming that achieving the feat is possible, he said New Delhi should stick to fiscal consolidation, apart from carefully planning policies.

"It requires a very clear policy orientation on energy infrastructure trade and things like that," he added.

Sounding a word of caution for the Narendra Modi government, the top banker said the Indian story could be derailed if steps are not taken to address the looming unemployment.

"India needs to generate 8.1 million jobs per year to maintain the employment rate," he said, adding that jobs are depreciating due to lack of opportunities for the female agricultural workers in the rural parts.

With agriculture holdings shrinking, the workers in rural India are forced to switch to the construction sector, he said, adding, "It is happening in areas that are borderline between urban and rural (and) as farming jobs disappear and other types of jobs do not appear."

(The above story first appeared on LatestLY on Apr 15, 2018 11:09 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).