The World Bank has retained India’s economic growth forecast at 6.3 per cent for the current financial year, and 6.4 per cent for the next.
The World Bank said in its Global Economic Prospects report that India is anticipated to maintain the fastest growth rate among the world’s largest economies, but its post-pandemic recovery is expected to slow, with estimated growth of 6.3 per cent in FY2023-24. The Bank has stuck to the growth estimate despite the National Statistical Office in its first advance estimates recently pegging the country’s real GDP expansion in the current fiscal year, at 7.3 per cent.
The report noted that the slowdown in India growth to 7.2 per cent in 2022-23 from 9.1 per cent in 2021-22, was primarily due to a weakening post-pandemic rebound, particularly in private investment and consumption. However, a strong performance in 2023 was underpinned by robust public investment growth and vibrant services activity, thanks to resilient domestic demand for consumer services and exports of business services.
The Bank, however, warned that global growth in 2024 is set to slow for a third year in a row, in what could delay poverty reduction and exacerbate debt levels in many developing countries. Global GDP is likely to grow 2.4 per cent in 2024, it said. That compares to 2.6 per cent in 2023, 3 per cent in 2022 and 6.2 per cent in 2021 when there was a rebound as the pandemic ended.
World Bank report said, merchandise exports slowed, reflecting weak external demand. Headline consumer price inflation remained within monetary authorities’ target band of 2-6% throughout most of 2023, with policy rates being kept unchanged since February 2023, it said.
“Investment is envisaged to decelerate marginally but remain robust, supported by higher public investment and improved corporate balance sheets, including in the banking sector. Private consumption growth is likely to taper off, as the post-pandemic pent-up demand diminishes and persistent high food price inflation is likely to constrain spending, particularly among low income households,” the Bank said.
