The World Bank has revised its economic growth forecast for India, anticipating a robust expansion of 7.5% in 2024, marking a significant adjustment of 1.2% from its previous projection. This upward revision is indicative of the country’s resilient economic performance amidst global uncertainties.
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Moreover, it aligns with a broader trend observed across South Asia, where the overall growth is forecasted to reach 6.0% in 2024, primarily driven by India’s strong growth trajectory, alongside notable recoveries in economies such as Pakistan and Sri Lanka.
The revised growth projection underscores India’s pivotal role as a key driver of economic growth within the South Asian region. Despite facing fiscal vulnerabilities and susceptibility to climate-related shocks, the region continues to demonstrate resilience and potential for sustained economic expansion.
Martin Raiser, the World Bank Vice President for South Asia, emphasized the importance of implementing policies aimed at stimulating private investment and fostering employment growth to enhance the region’s resilience against economic headwinds. He highlighted the need for concerted efforts to capitalize on the demographic dividend and unlock the full economic potential of the region.
Franziska Ohnsorge, the World Bank Chief Economist for South Asia, echoed similar sentiments, emphasizing the criticality of employment-centric policies in fully leveraging the region’s demographic dividend. She underscored that adopting such policies could significantly boost economic output and foster inclusive growth across the region.
Recent economic indicators from India paint a promising picture, with growth outperforming expectations in the final quarter of 2023. Inflation has remained well within the Reserve Bank of India’s targeted range, providing room for accommodative monetary policy measures. Additionally, financial conditions have remained supportive, with domestic credit issuance to the commercial sector witnessing robust growth.
Looking ahead, while a slight moderation in growth is projected for FY2024/25, India’s economic output is expected to remain resilient. Strong performance in the services and industry sectors, coupled with efforts to curb fiscal deficits and government debt, is anticipated to sustain economic momentum over the medium term.
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These measures, supported by consolidation efforts by the central government, are crucial for fostering sustainable economic growth and stability in the region.
