World Bank upgrades India’s economic growth forecast to 7.5% for 2024, a notable increase of 1.2% from its previous estimate, indicating the nation’s robust economic resilience amidst global uncertainties. This revision aligns with a broader positive trend across South Asia, where overall growth is projected to reach 6.0% in 2024, primarily propelled by India’s strong growth trajectory alongside recoveries in other economies like Pakistan and Sri Lanka. India’s elevated growth projection underscores its pivotal role as a key driver of economic expansion in the region, despite facing fiscal vulnerabilities and climate-related risks.
Martin Raiser, World Bank Vice President for South Asia, emphasizes the importance of policy measures aimed at stimulating private investment and employment growth to enhance the region’s resilience against economic challenges. He stresses the need for concerted efforts to capitalize on the demographic dividend and unlock the region’s full economic potential. Similarly, Franziska Ohnsorge, World Bank Chief Economist for South Asia, highlights the significance of employment-focused policies in maximizing the demographic dividend to boost economic output and foster inclusive growth across the region.
Recent economic indicators from India depict promising trends, with growth surpassing expectations in the final quarter of 2023. Inflation remains within the Reserve Bank of India’s targeted range, allowing for accommodative monetary policies, while financial conditions remain supportive, with robust growth in domestic credit issuance to the commercial sector. Looking ahead, a slight moderation in growth is forecasted for FY2024/25, but India’s economic resilience is expected to persist, driven by strong performances in the services and industry sectors, alongside efforts to address fiscal deficits and government debt, crucial for sustaining economic momentum and stability in the region.
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