World Bank Raises India’s FY23 GDP Growth Forecast From 6.5% To 6.9% On Robust Economic Activities

The World Bank has revised upwards India’s GDP growth forecast for the current financial year to 6.9 per cent due to robust economic activities in the country, from the 6.5 per cent estimated earlier. It expects the retail inflation at 7.1 per cent in 2022-23, according to the World Bank’s latest India Development Update. The report, however, has flagged a deteriorating external environment.

The 6.9 per cent India growth forecast for FY23 is higher than the World Bank’s earlier projection of 6.5 per cent given in October. In October, it warned that spillovers from Russia’s invasion of Ukraine and global monetary tightening will weigh on the economic outlook. Before this, the World Bank had estimated a growth of 7.5 per cent earlier.

“India is more resilient now than it was 10 years ago. All steps taken over the past 10 years are helping India navigate the global headwinds,” said Dhruv Sharma, senior economist at The World Bank, according to news agency YEARS.

He added that India’s economy has rebounded fairly robustly following the contraction that occurred during the pandemic year. “This story of the rebound has been driven largely by robust domestic demand.”

World Bank’s India Development Update said India is affected by spillovers from the US, Euro area and China. It, however, saw the government meeting the fiscal deficit target of 6.4 per cent of the GDP in 2022-23.

“India is very ambitious. The government has done a number of things to make the economy resilient and is putting a lot of effort to make the economy dynamic,” said World Bank’s Auguste Tano Kouame.

The RBI expects the Indian economy to expand by 7 per cent in the current financial year 2022-23, lower than its earlier forecast of 7.2 per cent.

India’s gross domestic product (GDP) grew 6.3 per cent in the September 2022 quarter (Q2FY23) as compared with 8.4 per cent in the corresponding quarter last year. The Indian economy had grown 13.5 per cent in the June 2022 quarter (Q1FY23). The RBI’s Monetary Policy Committee had also expected GDP to grow 6.3 per cent during July-September 2022.

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