NEW DELHI: The World Bank has decided to maintain its growth forecast for India in the fiscal year 2023-24 at 6.3%, the same as its previous April estimate. This affirmation is in response to India’s sustained robust economic performance, even in the face of significant headwinds.
In the recent India Development Update, the World Bank emphasized India’s impressive economic steadfastness amidst challenging global conditions. The Update took note of several factors that anchor India’s economic strength, such as a solid domestic consumption, significant investments in public infrastructure, and a fortified financial sector. Additionally, the update highlighted that the growth in bank credit escalated to 15.8% in the initial quarter of FY24, a notable increase from 13.3% in the corresponding quarter of FY23.
However, the World Bank also acknowledged that the Indian economy confronts various challenges due to ongoing global headwinds, encompassing sluggish demand, elevated interest rates, and geopolitical tensions.
The bank anticipates that these global challenges will persist and potentially intensify due to factors like high global interest rates, geopolitical conflicts, and subdued global demand.
Consequently, global economic growth is expected to decelerate over the medium term in light of these combined factors. Against this backdrop, the World Bank’s forecast for India’s GDP growth in FY24 remains at 6.3%.
The World Bank’s recent prediction aligns with those from other entities like the OECD, Asian Development Bank, and Fitch. However, it’s somewhat more conservative than forecasts by the Indian government and the Reserve Bank of India, which anticipate a growth rate of 6.5%. On the other hand, S&P Ratings estimates India’s growth at 6%. In the April-June period, India experienced an economic growth of 7.8% – the fastest in a year, propelled by dynamic service-sector activities and solid demand.