Indian Economy Set To Grow At 7.5 Per Cent In 2024: World Bank

The World Bank has revised its projections for the Indian economy, now anticipating a growth rate of 7.5 per cent in 2024.

This marks an increase of 1.2 per cent from previous estimates for the same period, reported Economic Times.

The latest South Asia Development Update released by the World Bank on Tuesday (2 April) highlights the region's strong growth prospects, with South Asia expected to remain the fastest-growing region globally for the next two years, with growth projected at 6.1 per cent in 2025.

Output growth in India is forecasted to reach 7.5 per cent in FY23/24 before moderating to 6.6 per cent over the medium term.

The robust performance is expected to be driven by strong activity in services and industry sectors.

However, challenges persist in neighboring countries.

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Bangladesh is projected to see output rise by 5.7 per cent in FY24/25, but faces constraints such as high inflation and trade restrictions.

Meanwhile, Pakistan's economy is expected to grow by 2.3 per cent in FY24/25 following a contraction in the previous fiscal year, while Sri Lanka is forecasted to experience growth of 2.5 per cent in 2025, supported by modest recoveries in reserves, remittances, and tourism.

In India, economic activity surpassed expectations in Q4 2023, with growth reaching 8.4 per cent year-on-year, supported by rapid increases in investment and government consumption.

Despite elevated food price inflation, overall inflation has remained within the Reserve Bank of India's target range.

Looking ahead, the World Bank projects a slowdown in growth between FY23/24 and FY24/25, mainly due to a deceleration in investment.

However, growth in services and industry is expected to remain robust, supported by strong construction and real estate activity.

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