World Bank Maintains Unaltered India GDP Growth Projection At 6.3%
The World Bank retained its GDP growth projection for India, confirming India's status as the swiftest expanding major economy worldwide. According to the World Bank's flagship Global Economic Prospects report released recently, India is anticipated to uphold its position with a growth rate of 6.3 per cent in FY24, remaining the fastest among the largest economies, despite a slower recovery from the pandemic.
The GDP growth forecast, unaltered since June last year, indicates a gradual recovery with an anticipated increase to 6.4 per cent in FY25 and 6.5 per cent in FY26. The report foresees a slight deceleration in investment, although remaining sturdy, propelled by increased public investment and healthier corporate balance sheets, notably in the banking sector. However, the report highlights limitations in private consumption growth, particularly among low-income households, which might restrict spending. Meanwhile, government spending is predicted to grow sluggishly, aligning with efforts to curtail current expenditures.
In several South Asian economies, including India, the impending parliamentary elections' uncertainty might hinder private sector activities, including foreign investments, as indicated in the report's cautionary note. Globally, the World Bank projects a further slowdown in growth to 2.4 per cent this year due to persisting effects of tight monetary policies, restricted financial conditions, and sluggish global trade and investment. Identified risks to the outlook encompass potential escalation of conflicts in the Middle East, disruptions in commodity markets, financial strain due to elevated debt and borrowing costs, enduring inflation, lower-than-anticipated activity in China, trade disruptions, and climate-induced disasters.
