Mumbai The performance of the Indian economy in 2024 has surprised even the International Monetary Fund. The World Bank has estimated that the Indian economy will grow at 7.5 percent in 2024, a revision of 1.2 percent from its previous forecast. This growth is part of a strong outlook for South Asia, with the region expected to grow at 6.0 percent in 2024, driven by strong growth in India and recoveries in Pakistan and Sri Lanka. Also read: Korcholi encounter update: Three more bodies found on the spot, number of dead Naxalites reaches 13…
According to a report, the World Bank’s South Asia Development Update states that with a projected growth of 6.1% in 2025, South Asia is set to retain its position as the fastest growing region globally for the next two years. is ready.
The World Bank has highlighted that India will be a major contributor to the region’s economy and is expected to see output growth of 7.5% in fiscal year 2023-24, followed by a slight decline to 6.6% in the medium term. According to the World Bank, activity in services and industry is expected to remain strong. The report also mentioned positive signs in Bangladesh and Sri Lanka with expected growth rates of 5.7% and 2.5% respectively.
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Martin Ryser, vice president for South Asia at the World Bank, expressed optimism about the region’s growth prospects in the short term, but cautioned about challenges such as fiscal vulnerabilities and climate risks. Franziska Ohnsorge, Chief Economist for South Asia at the World Bank, stressed the need for policies to increase private investment and employment growth to take advantage of the demographic dividend.
India’s economic performance in the fourth quarter of 2023 exceeded expectations, with a growth rate of 8.4% driven by investment and government spending. The country’s composite Purchasing Managers’ Index (PMI) stood at 60.6 in February, well above the global average, indicating a strong expansion. Inflation in India has remained within the Reserve Bank’s target range, supported by stable policy rates since February 2023.
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Financial conditions in India remain favourable, with household debt issuance growing by 14% year-on-year in December 2023. The non-performing-loan ratio has declined to 3.2%, and regulatory capital adequacy requirements have been exceeded. Despite the decline in FDI, foreign portfolio investment has increased, leading to an increase in foreign reserves.
The World Bank estimates that India’s output growth will reach 7.5% in the financial year 2023-24, after which it will decline to 6.6% in the financial year 2024-25. The reason for the slowdown is the decline in investment growth from last year’s high level. However, the bank expects strong growth in the service and industry sectors, supported by construction and real estate activities.
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The report forecasts a decline in fiscal deficit and government debt over the medium term, supported by strong output growth and government consolidation efforts. The overall outlook suggests a positive trajectory for India’s economy, with growth dividends from public investment likely in the coming years.
