World Bank revises India's GDP growth forecast upward due to robust economic activities
New Delhi, December 6: The World Bank has revised India's 2022-23 GDP growth forecast upward to 6.9 per cent from the earlier estimate of 6.5 per cent, owing to robust economic activities, said Dhruv Sharma, Senior Economist at the World Bank.
According to the World Bank's latest India Development Update, real GDP growth in India is expected to be 6.9 percent in FY22-23, compared to 8.7 percent in FY21-22.
"India is more resilient now than it was 10 years ago. All steps taken over the past 10 years are helping India navigate the global headwinds," a senior economist at the World Bank said.
He went on to say that India's economy has recovered fairly well from the pandemic year's contraction. "The story of the rebound has been largely driven by robust domestic demand," Sharma said.
World Bank, in its October report, lowered India's 2022-23 growth rate from its June forecast, by 1 percentage point to 6.5 per cent. In the previous report, the international organisation had projected India's growth rate to be at 7.5 per cent for the period.
CPI-based retail inflation is showing signs of moderation, according to government data, however, still remains above the central bank's upper tolerance level of 6 per cent since January this year.
The inflation fell to 6.77 per cent in October from 7.41 per cent in the preceding month. Easing prices in food basket were the reason for the decline.
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"India's economy has been remarkably resilient to the deteriorating external environment, and strong macroeconomic, fundamentals have placed it in good stead compared to other emerging market economies," said Auguste Tano Kouame, World Bank's Country Director in India. "However, continued vigilance is required as adverse global developments persist," he said.
The report forecasts that the Indian economy will grow at a slightly lower rate at 6.6 per cent in the 2023-24 fiscal year. A challenging external environment will affect India's economic outlook through different channels. The report states that rapid monetary policy tightening in advanced economies has already resulted in large portfolio outflows and depreciation of the Indian Rupee while high global commodity prices have led to a widening of the current account deficit.
India's external position has also improved considerably over the past decade. The current account deficit is adequately financed by improving foreign direct investment inflows and a solid cushion of foreign exchange reserves.
- ANI
