The World Bank has said that the Indian economy will grow by 7.5 percent in 2024, driving the growth momentum of the South Asian region, which is projected to achieve a robust growth rate of 6 percent in the same year.
According to the report “Jobs for Resilience” released on Tuesday, India’s growth is expected to reach 7.5 percent in FY23-24 before returning to 6.6 percent over the medium term. It is expected that activity in services and industry will continue to be strong.
The report highlighted ongoing structural challenges that pose a threat to sustained growth, thereby hindering the South Asian region’s ability to generate employment and respond to climate shocks.
The report forecasts a mild recovery in the Pakistan economy with growth projected at 2.3 percent in FY24-25, while in Sri Lanka output growth is expected to increase to 2.5 percent in 2025, with recoveries in reserves, remittances, and tourism.
In Bangladesh, output is expected to rise by 5.7 percent in FY24/25, with high inflation and restrictions on trade and foreign exchange constraining economic activity.
The report also recommends a range of policies to spur firm growth and boost employment, including increasing trade openness and access to finance, improving business climates and institutions, removing financial sector restrictions, improving education, and removing restrictions on women’s economic activity.
Credit rating agencies revise projections
Earlier on March 27, Morgan Stanley revised its India GDP growth forecast upwards for the financial year 2024-25 (FY25) to 6.8%, up from its previous estimate of 6.5%.
The firm also revised its growth forecast for the ongoing financial year, FY24, to 7.9%.
Additionally, Moody’s raised its projection from 6.6% to 8% for the current fiscal year and expects India to emerge as the fastest-growing economy among the G-20 countries.
Similarly, CareEdge Ratings has predicted India’s GDP to grow at 7.6 percent in FY 2023-24, and around 7 percent in the next financial year.
(Inputs from ANI)