World Bank Cuts India's Growth Forecast For 2023-24: Report The World Bank also signified that the Indian government is likely to meet its fiscal deficit target of 5.9% of GDP in 2023-24
By Teena Jose
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The World Bank in its latest India Development Update report has cut India's growth forecast for 2023-24 to 6.3% from earlier 6.6%, according to ANI report. According to the World Bank, India's growth is expected to be constrained by slower consumption growth and challenging external conditions.
In an official statement released on Tuesday, the World Bank said that, ""Rising borrowing costs and slower income growth will weigh on private consumption growth, and government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures."
Auguste Tano Kouame, World Bank's country director in India, reportedly said in a statement that, "The Indian economy continues to show strong resilience to external shocks. Notwithstanding external pressures, India's service exports have continued to increase and the current-account deficit is narrowing."
Pointing to India's inflation, it said, although headline inflation is elevated, it is projected to decline to an average of 5.2% in 2023-24, amid easing global commodity prices and some moderation in domestic demand.
In this context, the release also added that, "The Reserve Bank of India has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate. India's financial sector also remains strong, buoyed by improvements in asset quality and robust private-sector credit growth."
Furthermore, the World Bank also signified that the Indian government is likely to meet its fiscal deficit target of 5.9% of GDP in 2023-24. The general government deficit is also projected to decline. As a result, the debt-to-GDP ratio is projected to stabilise.
According to the report, the World Bank also noted that, "The current account deficit is projected to narrow to 2.1% of GDP from an estimated 3% in just concluded 2022-23 on the back of robust service exports and a narrowing merchandise trade deficit."
