India GDP growth likely to moderate to 6.3% in FY24: World Bank

According to a recent report by the World Bank, India’s GDP growth is predicted to slow down on April 1 to 6.3% from 6.6% in the fiscal year 2024. This decline is attributed to a reduction in consumption due to decreased income levels. However, experts believe that India’s high level of services exports, which reached a new peak in the last quarter of 2021, will help to protect the economy from external risks since the global economy is slowing down and is expected to have a negative impact on the country’s merchandise exports.

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According to the India Development Update published by the World Bank, retail inflation in India is projected to decrease from 6.6% to 5.2% in the fiscal year 2023-24. The update also notes that the country’s Current Account Deficit (CAD) is expected to reach 5.2% in FY24. Asia’s third-largest economy recorded year-on-year growth of 4.4 per cent in October-December, down from 11.2 per cent a year back and 6.3 per cent in the preceding quarter.

It also pointed to some downside risks to India’s growth in the current fiscal. Recent financial sector turmoil in the US and Europe could reduce appetite for emerging market assets, trigger another bout of capital flight and put pressure on the Indian rupee, it said, adding that tighter global financial conditions could also weigh on the risk appetite for private investment in India.

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