New Delhi: Exuding confidence over the Indian economy due to its current pace of growth, the World Bank has said that the country’s economy is expected to have grown 7.5 per cent in the 2023-24 fiscal year on the back of robust growth in the third quarter, revising its earlier forecast of 6.3 per cent. However, it also expects growth to pick up in subsequent years as a decade of robust public investment starts yielding dividends, according to the World Bank’s latest South Asia Development Update released on Tuesday late night.
Despite projecting a higher growth for FY 24, the global agency has also projected that the economic growth in India for FY25 is significantly moderate, raising its GDP growth projection for India by 20 basis points to 6.6 per cent in FY25. It also asserted that the expected slowdown in growth between FY23/24 and FY24/25 mainly reflects a “deceleration in investment from its elevated pace in the previous year”.
Compared with the World Bank’s projection for FY25, the forecast is lower than that of the Reserve Bank of India (RBI), which has pegged the growth rate at 7 per cent for this fiscal (2024-25). For Q1, the RBI has also estimated 7.2 per cent GDP growth; Q2 GDP is estimated at 6.8 per cent, Q3 at 7 per cent and Q4 at 6.9 per cent. “The growth in services and industry is expected to remain robust, the latter aided by strong construction and real estate activity,” the report noted.
As per its latest report, South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1 per cent in 2025, mainly driven mainly by the growth in India coupled with recovery in Pakistan and Sri Lanka’s GDP. “In neighbouring Bangladesh, output is expected to rise by 5.7 per cent in FY25 with high inflation and restrictions on trade and foreign exchange constraining economic activity,” the report said.
The latest update of the bank further noted that inflationary pressures are expected to subside, creating more policy space for easing financial conditions. “Over the medium term, the fiscal deficit and government debt are projected to decline, supported by robust output growth and consolidation efforts by the central government,” the Word bank noted in its update.
