India’s GDP Growth Likely to Moderate to 6.3% in FY24: World Bank Report

The World Bank on Tuesday stated it has lowered its forecast for India’s financial progress in the present fiscal yr that began on April 1 to 6.3 per cent from 6.6 per cent.

“The World Bank has revised its FY23/24 GDP forecast to 6.3 per cent from 6.6 per cent (December 2022). Growth is predicted to be constrained by slower consumption progress and difficult exterior situations. Rising borrowing prices and slower earnings progress will weigh on non-public consumption progress, and authorities consumption is projected to develop at a slower tempo due to the withdrawal of pandemic-related fiscal assist measures,” it said.

It further said India’s growth continues to be resilient despite some signs of moderation in growth in the second half of the last fiscal.

“Strong domestic demand, underpinned by robust consumer spending by higher-income groups and higher public investment, was the main growth driver. However, consumer spending by low-income groups was weak due to slow income growth,” it stated.

Inflation is elevated, however pressures are moderating as meals and gasoline costs reasonable, the India Development Update, the World Bank India’s biannual flagship publication, stated. It, nevertheless, stays above the higher threshold of the Reserve Bank of India’s (RBI) goal vary of 2-6 p.c.

Since May 2022 the RBI’s Monetary Policy Committee (MPC) has hiked the repo charge (its foremost coverage charge) by 250 foundation factors, it stated.

It additionally pointed to some draw back dangers to India’s progress in the present fiscal. Recent monetary sector turmoil in the US and Europe might scale back urge for food for rising market belongings, set off one other bout of capital flight and put stress on the Indian rupee, it stated, including that tighter world monetary situations might additionally weigh on the danger urge for food for personal funding in India.

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