India’s GDP To Grow At 6.3% For FY23-24, Forecasts World Bank 

Mumbai: India’s GDP growth is likely to be at 6.3% for the financial year 2023-24, according to the World Bank’s latest India Development Update. “The expected moderation is mainly due to challenging external conditions and waning pent-up demand,” it said in a statement. 

This decision has been made as India’s economy grows strongly despite significant foreign challenges. The bank has already revised its April growth estimate for India downward. 

India’s amazing resiliency in a competitive international context was noted by the World Bank in its most recent India Development Update, which was published today. 

The research emphasized that India’s economic resilience is supported by several pillars, including strong domestic demand, significant investments in public infrastructure, and a growing financial sector. 

Additionally, it noted that bank credit growth had risen sharply to 15.8% in the first quarter of FY23/24 from 13.3% in the same period of FY22/23. 

The World Bank also highlighted that the Indian economy faces several difficulties due to persistent global headwinds, including weak demand, high-interest rates, and geopolitical tensions. 

Due to elements including high global interest rates, geopolitical conflicts, and weak global demand, the bank believes that these global issues will endure and may worsen. 

As a result of these combined variables, it is anticipated that global economic growth will slow over the medium term. In light of this, the World Bank’s prediction for India’s GDP growth in FY23/24 is unchanged at 6.3%. 

The World Bank’s country director for India, Auguste Tano Kouame, said, “An unfavorable global climate would continue to provide problems in the medium term. Utilizing public expenditure to spur private investment would improve India’s ability to take advantage of international possibilities and experience stronger growth in the future. 

The World Bank also highlighted the effects of rising prices linked to unfavorable weather. 

It was highlighted that unfavorable weather conditions contributed to a recent rise in inflation, with headline inflation hitting 7.8% in July as a result of increases in the cost of commodities such as wheat and rice. 

The bank anticipates a steady decline in inflation as food prices return to normal and government initiatives improve the availability of basic goods. 

The principal author of the IDU research and senior economist at the World Bank, Dhruv Sharma, stated, “While the jump in headline inflation may temporarily hurt consumption, we predict a stabilization. Overall, the environment will continue to be favorable for private investment. 

It noted that unfavorable weather conditions led to a spike in inflation in recent months, with headline inflation reaching 7.8 percent in July due to surges in food prices such as wheat and rice. 

The bank expects inflation to gradually recede as food prices normalize and government measures enhance the supply of essential commodities. 

Dhruv Sharma, Senior Economist at the World Bank and lead author of the IDU report, commented, “While the spike in headline inflation may temporarily affect consumption, we anticipate a moderation. Overall, conditions will remain conducive for private investment.” 

Additionally, the report suggested that foreign direct investment in India is likely to expand as global value chains continue to rebalance.

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