World Bank cuts India growth forecast to 6.3%
New Delhi, Apr 4 (EFE).- The World Bank Tuesday said it lowered India’s economic growth projection for the current fiscal to 6.3 percent from its earlier estimate of 6.6 percent.
“Growth is expected to be constrained by slower consumption growth and challenging external conditions,” the World Bank said in its India Development Update.
“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.”
The bank praised India’s growth as “resilient despite some signs of moderation in growth.”
The World Bank update noted that significant challenges remained in the global environment.
“The Indian economy continues to show strong resilience to external shocks,” said Auguste Tano Kouame, World Bank’s Country Director in India.
“Notwithstanding external pressures, India’s service exports have continued to increase, and the current-account deficit is narrowing.”
The bank noted that the headline inflation was projected to decline to an average of 5.2 percent in fiscal 2023-24, which began on Apr.1
The decline would be due to easing global commodity prices and some moderation in domestic demand.
The Reserve Bank of India has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate.
The bank noted that the federal government was likely to meet its fiscal deficit target of 5.9 percent of GDP in the current fiscal.
“Spillovers from recent developments in financial markets in the US and Europe pose a risk to short-term investment flows to emerging markets, including India,” said Dhruv Sharma, Senior Economist, at World Bank, and lead author of the report. “But Indian banks remain well capitalized.” EFE