Steady Growth Ahead: World Bank’s Forecast for India
In a world grappling with economic uncertainties, India emerges as a beacon of growth and stability, according to the latest World Bank report. With an estimated growth rate of 8.2 percent in fiscal year 2023/24, India is set to maintain its position as the fastest-growing major economy. The report forecasts a steady growth trajectory, with India expected to clock a growth rate of 6.7 percent over the next three years.
This positive outlook for India comes at a time when global growth remains subdued. Despite projections of a slight uptick to an average of 2.7 percent in 2025-26, global growth is still below pre-pandemic levels. The report highlights that countries representing more than 80 percent of the world’s population and global GDP are growing at a slower pace compared to the decade before COVID-19.
In the South Asia region, India’s growth momentum is a driving force, although it is expected to moderate slightly from previous years. The report anticipates a growth rate of 6.2 percent in 2024, with steady growth projected at the same rate in 2025-26. While India leads the growth trajectory, other economies in the region, such as Bangladesh, Pakistan, and Sri Lanka, are also expected to experience robust growth.
The moderation in India’s growth is attributed to a slowdown in investment growth from a high base. However, the report emphasizes that investment growth is expected to remain robust, supported by strong public and private investments. Additionally, factors such as recovery in agricultural production and declining inflation are expected to bolster private consumption growth.
While global inflation is projected to moderate, the pace of decline is slower than previously anticipated. This could lead to central banks maintaining cautious approaches to policy interest rates. In India, inflation has remained within the Reserve Bank’s target range since September 2023, signaling a favorable macroeconomic environment.
However, challenges persist in the region, with regional inflation remaining elevated due to disruptions in local food supply chains and increased energy prices. Despite these challenges, India’s growth trajectory remains resilient, offering a glimmer of hope amidst global economic uncertainties.
As India continues to chart its path towards economic recovery and sustainable growth, the World Bank’s optimistic projections underscore the country’s potential to emerge stronger and more prosperous in the years to come. With prudent policy measures and concerted efforts, India is poised to remain a key driver of global economic growth and prosperity.
