The World Bank recently released its June 2024 Global Economic Prospects, in which it forecasts India to remain the fastest-growing major economy, expecting an average annual growth rate of 6.7% from FY25 to FY27.
- The World Bank has revised India’s upward growth projections by 0.2 percentage points for FY25 and FY26, now forecasting growth rates of 6.6% and 6.7%, respectively.
- This update reflects an improvement in the economic outlook compared to earlier estimates.
World Bank
- Establishment: 1944 during the Bretton Woods Conference,
- The World Bank originated as the International Bank for Reconstruction and Development (IBRD)
- It comprises five institutions committed to addressing global challenges through sustainable solutions.
- Headquarter: Washington, D.C., United States
- Objective: Its primary goal is to alleviate poverty and promote shared prosperity in developing nations.
- Members: 189 member countries, including India
- Major Reports: Ease of Doing Business, Human Capital Index, World Development Report, Migration and Development Brief, and Global Economic Prospects.
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About Global Economic Prospects Report
- This report was released by the World Bank.
- It analyzes current global economic trends and future outlook.
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Key Highlights of India’s Economic Growth Forecast- 2023-2027
- Strong Growth Outlook:
- India’s economic growth is projected to reach 8.2% in 2023-24, which is 1.9 percentage points higher than the World Bank estimated in January.
- Moderation In India’s Growth: The World Bank anticipates a moderation in India’s growth rate to an average of 6.7% annually from FY25 to FY27.
- This slowdown is attributed to reduced investment following a period of high growth.
- Factors Driving Growth:
- Investment Growth will likely remain robust, supported by strong public and private sector investments.
- Public investment will be particularly significant.
- Private Consumption is set to benefit from improved agricultural production and decreasing inflation rates.
- Government Expenditure is projected to grow slowly as part of reducing current spending relative to GDP.
- Global Economic Outlook:
- Economic Stabilization: Globally, economic growth is forecasted to stabilize at 2.6% this year, marking the first time in three years despite geopolitical tensions and high interest rates.
- Growth is expected to slightly increase to 2.7% in 2025-26, driven by modest gains in trade and investment.
- Inflation worldwide: Moderate inflation is possible worldwide, though at a slower pace than previously assumed, averaging 3.5% this year.
- South Asia’s Economic Scenario: Growth in the South Asia region, primarily led by India, is projected to slow to 6.2% in 2024 and maintain this rate in 2025-26.
- This reflects steady economic expansion aligned with the region’s potential growth, albeit weaker than pre-pandemic levels.
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June 14, 2024
