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Published: April 3, 2024
Updated: April 3, 2024

India's Economic Growth Projections pegged at 7.5% by World Bank and promising Regional Outlook

The World Bank forecasts India's economy to surge at a promising rate of 7.5% in 2024, signaling robust growth potential driven by key sectors such as services and industry. However, a moderated growth trajectory of 6.6% is anticipated over the medium term.

India's Growth Trajectory:

The Indian economy is poised to experience a significant upswing with an expected output growth of 7.5% in the fiscal year 2024, as per the World Bank's revised projections. This surge is primarily attributed to resilient activity in services and industry. Nevertheless, a gradual slowdown to 6.6% growth is anticipated in the medium term.

Medium-Term Outlook:

Looking ahead, the World Bank projects a slight moderation in India's growth rate, foreseeing a dip to 6.6% in fiscal year 2025. This adjustment is largely influenced by a deceleration in investment compared to the previous year's elevated pace.

Fiscal Stability and Government Debt:

Despite the anticipated growth moderation, India's fiscal deficit and government debt are projected to decline over the medium term. This positive trend is bolstered by robust output growth and concerted efforts by the central government towards fiscal consolidation.

Recent Economic Performance:

India's economic activity in the final quarter of 2023 surpassed expectations, registering an impressive 8.4% growth compared to the previous year. This growth momentum was fueled by increased investment and government consumption. Additionally, key indicators such as the composite purchasing managers index (PMI) and inflation remained favourable.

Regional Economic Landscape:

The World Bank's latest South Asia Development Update underscores the region's promising growth prospects, with South Asia expected to maintain its position as the world's fastest-growing region. India's stellar performance is set to drive this growth, complemented by recoveries in Pakistan and Sri Lanka.

Growth Projections for South Asia:

Bangladesh is forecasted to witness a substantial rise in output by 5.7% in fiscal year 2025, while Pakistan's economy is expected to grow by 2.3% during the same period. Sri Lanka's output growth is also anticipated to strengthen to 2.5% in 2025, indicating a positive regional outlook.

World Bank's projections paint a promising picture for India's economic growth trajectory, with sustained momentum expected in the coming years. Amidst regional challenges, India's resilience and potential continue to position it as a key driver of growth in South Asia.