Syllabus: GS-III
Subject: Economic Development;
Topic: Issues relating to planning, mobilization, of resources, growth, development, and employment.
Issue: World Bank’s Growth Forecast.
Context: The World Bank maintains India’s economic growth forecast at 6.3% for FY2023/24, citing a slow post-pandemic recovery and weak external demand.
Synopsis:
- The post-pandemic recovery in India is expected to slow, with private investment and consumption weakening in 2022-23.
- The World Bank projects a recovery in FY2024/25 and FY2025/26, with growth gradually increasing to 6.4% and 6.5%, respectively.
- The global growth outlook is less optimistic, with the World Bank forecasting a third consecutive year of slowing growth in 2024.
- Merchandise exports in India slowed due to weak external demand, while public investment and vibrant services activity supported growth in 2023.
- The report notes a marginal deceleration in investment, robust public investment, improved corporate balance sheets, and slowing private consumption growth.
- Government consumption is expected to grow slowly as part of efforts to lower current spending, and government revenues may benefit from solid corporate profits.
World Bank:
Conclusion: Despite national estimates projecting higher growth, the World Bank retains India’s economic forecast, anticipating a gradual recovery amid post-pandemic challenges.
