According to Dhruv Sharma, Senior Economist at World Bank. The World Bank has increased India’s GDP growth forecast for 2022-23 from 6.5 percent to 6.9 percent due to solid economic activity.
The most recent India Development Update from the World Bank projects that real GDP growth in India would be 6.9% in FY22-23 comparing to 8.7% in FY21-’22.
“India has improved its resiliency over the past ten years.
All actions made during the previous ten years have assisted India in navigating the world’s challenges. According to Sharma, a senior economist at the World Bank.
He also said that after contracting during the pandemic year, India’s economy had recovered fairly strongly. Sharma claimed that the strong domestic demand was largely to blame for the recovery’s success.
The World Bank reduced India’s growth rate for 2022–2023 from its June prediction 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 study.
Government figures indicate that CPI-based retail inflation are beginning to moderate. But it has been above the central bank’s maximum tolerance level of 6% since January of this year.
GDP Forecast for India
In October, inflation dropped to 6.77 percent from 7.41 percent the previous month. The reduction was cause by decreasing food basket prices.
According to Auguste Tano Kouame, the World Bank’s Country Director in India. “India’s economy has been extraordinarily robust to the crumbling external environment, … Strong macroeconomic fundamentals have placed it in excellent position in comparison to other emerging market economy.”
However, he added, “continuous vigilance is necessary as negative global developments persist.”
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 already has caused significant portfolio outflows and a depreciation of Indian Rupee.
While rising commodity price prices have widened the current accounts deficit.
Over the past ten years, India’s external posture has also significantly improved.
An increase in direct investment from abroad as well as a strong cushion of foreign reserves provide ample funding for the current account deficit.