The World Bank has retained its projection of 6.3% growth in GDP during the current fiscal as against the RBI’s expectation of 6.5%. “The expected moderation is mainly due to challenging external conditions and waning pent-up demand. However, service sector activity is expected to remain strong with growth of 7.4% and investment growth is also projected to remain robust at 8.9%,” said the World Bank’s latest ‘India Development Update’. The April update too had forecast India’s GDP to grow at 6.3% in 2023-24 as against its earlier projection of 6.6% made in October last year. The report by the Asian Development Bank (ADB), which will follow, is awaited to see if it retains or lowers its earlier projection of 6.4% GDP growth in the current fiscal, down from its earlier forecast of 6.8%. The RBI too will give fresh projections at the end of its Monetary Policy Committee meeting chaired by its chief Shaktikanta Das on October 6.
“An adverse global environment will continue to pose challenges in the short-term,” said Auguste Tano Kouame, World Bank’s Country Director in India. “Tapping public spending that crowds in more private investments will create more favorable conditions for India to seize global opportunities in the future and thus achieve higher growth,” he said. “While the spike in headline inflation may temporarily constrain consumption, we project a moderation. Overall conditions will remain conducive for private investment. The volume of foreign direct investment is also likely to grow in India as rebalancing of the global value chain continues,” said Dhruv Sharma, senior economist, World Bank, and lead author of the report.