World Bank reduces India’s GDP growth forecast for 2023-24
The World Bank has reduced India’s GDP growth forecast for the financial year 2023-24 to 6.3 percent, which is 0.3 percent less than its earlier estimate. The global lender cited rising inflation and a decrease in private consumption as the reasons for the reduction. It also expects government expenditure to be affected due to fiscal consolidation. However, the World Bank believes that India will continue to achieve the highest growth rate among the largest economies, despite a slight decrease in the pace of GDP growth in the current financial year.
Reasons for the reduction
The World Bank has attributed the decrease in India’s GDP growth to high inflation rates, which have resulted in a decrease in private consumption. Additionally, the government’s fiscal consolidation measures are also expected to impact government expenditure.
Positive outlook
Despite the reduction in GDP growth forecast, the World Bank believes that India will continue to achieve the highest growth rate among the largest economies. It also expects India’s growth rate to pick up from the financial year 2025-26 due to the government’s reforms and inflation rate coming back to the tolerance level. The World Bank estimates that India’s economic growth rate could be 6.4 percent in the financial year 2024-25.
India’s economic growth rate
India’s GDP growth rate has increased rapidly by 7.2 percent in the financial year 2022-23, which is lower than 9.1 percent in 2021-22. However, India has achieved an economic growth rate of more than 7 percent at a time when many major economies are in the shadow of recession.
In conclusion, the reduction in India’s GDP growth forecast by the World Bank is a cause for concern. However, the positive outlook for India’s economic growth in the long run, coupled with its ability to achieve a high growth rate in the current scenario, is a testament to the country’s resilience and potential for growth.
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