India's GDP growth forecast at 6.3% for FY23-24 amid robust service sector activity

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India's GDP growth forecast at 6.3% for FY23-24 amid robust service sector activity

The World Bank's latest India Development Update (IDU) has projected a 6.3% GDP growth for India in the fiscal year 2023-24, underpinned by strong service sector activity and investment growth. The report was released on Tuesday.

Despite facing global challenges, India has managed to sustain robust growth, outperforming most G20 nations and doubling the average for emerging market economies. This resilience is attributed to substantial public infrastructure investment and a significant surge in bank credit growth, which reached 15.8% in the first quarter of FY23-24.

The country has also been dealing with weather-induced headline inflation, primarily driven by increased food prices. However, the World Bank expects this inflation to moderate in the near future.

The IDU report further anticipates fiscal consolidation in India, marked by a declining fiscal deficit and a narrowing current account deficit. This forecast is supported by considerable foreign reserves and an ongoing global value chain rebalancing. As one of the fastest-growing major economies, India's performance is noteworthy, especially considering its ability to maintain strong growth amidst global uncertainties.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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