World Bank Maintains India's GDP Growth Forecast at 6.3%

New Delhi, October 3, 2023 - The World Bank has maintained its forecast for India's GDP growth in the financial year 2023-24 at 6.3%, despite a number of external challenges. The decision was taken in view of the continued strong economic growth in India.

 

Strong Economic Growth Continues

 

In its report, the World Bank said that India's growth will remain resilient in the face of global challenges. According to the latest India Development Update (IDU), India's growth is showing resilience in the face of a challenging global environment. The World Bank has lowered its forecast for India's growth in 2023-24 to 6.3% from 6.6% in its previous report.

 

India Remained Among Fastest-Growing Economies in 2022-23

 

According to the World Bank's latest update on India's development, the country was among the fastest-growing major economies in 2022-23, with a growth rate of 7.2%, despite major global challenges.

 

India's Growth Rate Was Nearly Twice That of Emerging Market Economies

 

It is noteworthy that India's growth rate was the second-highest growth rate among G20 countries and nearly twice the average for emerging market economies. This resilience was supported by strong domestic demand, strong public infrastructure investment, and a strong financial sector. Bank loan growth in the first quarter of the financial year 2023-24 rose to 15.8%, up from 13.3% in the first quarter of the financial year 2022-23.

 

Growth Expected in Service Sector and Investment

 

The report expects that global headwinds will persist and intensify due to rising global interest rates, geopolitical tensions, and sluggish global demand. As a result, global economic growth is also set to slow in the medium term against the backdrop of these combined factors. In this context, the World Bank estimates that India's GDP growth will be 6.3% for the financial year 2023-24. However, service sector activity is also expected to remain strong with a growth of 7.4%, as well as investment growth is also expected to remain strong at 8.9%.

 

Key Highlights of the Report

 

The World Bank has maintained its forecast for India's GDP growth in the financial year 2023-24 at 6.3%, despite a number of external challenges.

The report expects that global headwinds will persist and intensify due to rising global interest rates, geopolitical tensions, and sluggish global demand.

As a result, global economic growth is also set to slow in the medium term.

In this context, the World Bank estimates that India's GDP growth will be 6.3% for the financial year 2023-24.

However, service sector activity is also expected to remain strong with a growth of 7.4%, as well as investment growth is also expected to remain strong at 8.9%.

 

Analysis

 

The World Bank's decision to maintain its forecast for India's GDP growth at 6.3% is a positive sign for the Indian economy. The report's findings suggest that India's economy is resilient and is well-positioned to withstand the current global challenges.

 

The report's expectations for strong growth in the service sector and investment are also encouraging. These sectors are key drivers of India's economic growth, and their continued strength will help to support the country's overall economic performance.

 

Overall, the World Bank's report provides a positive outlook for India's economic growth in the financial year 2023-24.