World Bank Leaves India GDP Growth Forecast Unchanged At 6.3%

The World Bank left India's GDP growth forecast unchanged while reaffirming India's position as the world's fastest-growing major economy.

India is expected to maintain the fastest growth rate among the world’s largest economies, but its post-pandemic recovery is expected to slow, with an estimated growth of 6.3% in FY24, the World Bank said in its flagship Global Economic Prospects report published on Tuesday.

India's GDP growth forecast remains unchanged from June last year. GDP growth is expected to recover gradually, edging up to 6.4% in FY25 and 6.5% in FY26, it said.

Investment is envisaged to decelerate marginally but remain robust, supported by higher public investment and improved corporate balance sheets, including in the banking sector, the report said.

Private consumption growth is likely to taper off as post-pandemic pent-up demand diminishes and persistent food price inflation is likely to constrain spending, particularly among low-income households, it said. Meanwhile, government consumption is expected to grow slowly, in line with the central government’s efforts to lower the share of current spending.

In a number of South Asian economies—including India—the heightened uncertainty around the upcoming parliamentary elections could dampen activity in the private sector, including foreign investment, the report cautioned.

Globally, growth is set to slow further this year to 2.4% amid the lagged and ongoing effects of tight monetary policy, restrictive financial conditions, and feeble global trade and investment, the World Bank said.

Downside risks to the outlook include an escalation of the recent conflict in the Middle East and associated commodity market disruptions, financial stress amid elevated debt and high borrowing costs, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters.asters.