Lagatar24 Desk
New Delhi, Dec 6: The World Bank has increased its estimate of India’s GDP growth for 2022–2023 from 6.5% to 6.9% due to robust economic activity, according to Dhruv Sharma, Senior Economist at the World Bank.
As per World Bank’s most recent India Development Update, real GDP growth in India is predicted to be 6.9% in FY22–23 as opposed to 8.7% 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,” Sharma said.
“India’s economy has rebounded fairly robustly following the contraction that occurred during the pandemic year. This story of the rebound has been driven largely by robust domestic demand” he added.
The World Bank reduced India’s growth rate for 2022–2023 from its June forecast by one percentage point, to 6.5%, in its October report. The international organisation had predicted India’s growth rate to be 7.5% for the time period in the previous report.
Government figures indicate that CPI-based retail inflation is beginning to moderate, but it has been above the central bank’s upper tolerance level of 6% since January of this year.
Inflation decreased from 7.41 percent the month before to 6.77 percent in October. The reduction was caused by decreasing food basket prices.
“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.
According to the estimate, India’s GDP will expand at a slightly slower rate—6.6%—during the fiscal year 2023–2024. Through a variety of avenues, a difficult external environment will harm India’s economic outlook. According to the research, the quick tightening of monetary policy in advanced economies has already caused significant portfolio outflows and a depreciation of the Indian Rupee, while rising global commodity prices have widened the current account deficit.
Over the past ten years, India’s external posture has also significantly improved. An increase in foreign direct investment inflows and a strong cushion of foreign exchange reserves provide ample funding for the current account deficit.
