New Delhi, Oct 3 (FN Bureau) The World Bank has projected India’s GDP growth for the current financial year 2023-24 at 6.3% even as global headwinds continue to persist and intensify further due to high interest rates, geopolitical tensions and sluggish global demand. In its latest India Development Update (IDU) released on Tuesday, the World Bank noted that India continues to show resilience against the backdrop of a challenging global environment. Highlighting various challenges, the Bank said that global economic growth would slow down over the medium term. “In this context, the World Bank forecasts India’s GDP growth for FY23/24 to be at 6.3%,” the latest update on the Indian economy said.
As per the IDU, the expected moderation is mainly due to challenging external conditions and waning pent-up demand. It, however, added that service sector activity is expected to remain strong with growth of 7.4% and investment growth is also projected to remain robust at 8.9%. “An adverse global environment will continue to pose challenges in the short-term,”said Auguste Tano Kouame, World Bank’s Country Director in India. “Tapping public spending that crowds in more private investments will create more favorable conditions for India to seize global opportunities in the future and thus achieve higher growth,” he further said.
The IDU, the Bank’s flagship half yearly report on the Indian economy, observed that despite significant global challenges, India was one of the fastest-growing major economies in FY22/23 at 7.2%. “India’s growth rate was the second highest among G20 countries and almost twice the average for emerging market economies. This resilience was underpinned by robust domestic demand, strong public infrastructure investment and a strengthening financial sector. Bank credit growth increased to 15.8% in the first quarter of FY23/24 compared with 13.3% in the first quarter of FY22/23,” it noted.