Indian Economy Poised for Growth: World Bank Forecasts 7.5% Expansion in 2024

Revised Projections

The World Bank has recently announced its revised projections for the Indian economy in 2024, forecasting a robust growth rate of 7.5 percent. This marks an upward adjustment of 1.2 percent from its earlier estimations for the same period.

Finding multibagger stocks is important for building wealth. Discover potential multibaggers at Sovrenn Discovery 

Drivers of Growth

The anticipated expansion is underpinned by resilient performance across India's services and industrial sectors. However, the Bank anticipates a slight moderation in growth to 6.6 percent over the medium term. 

Medium-Term Outlook

Looking ahead, the World Bank envisions India's output growth to sustain at 7.5 percent for the fiscal year 2024 before gradually easing to 6.6 percent in FY25. This projected slowdown primarily stems from a deceleration in investment following its elevated pace in preceding years.

Fiscal Stability and Consolidation Efforts

Despite the expected moderation in growth, the Bank highlights a positive trajectory in India's fiscal metrics. It anticipates a decline in the fiscal deficit and government debt over the medium term. These improvements are attributed to robust output growth coupled with consolidation initiatives undertaken by the central government.

Recent Economic Performance

India's economic activity in the final quarter of 2023 surpassed expectations, registering an impressive 8.4 percent growth compared to the previous year. This growth was supported by increased investment and government consumption.Notably, India's composite Purchasing Managers Index (PMI) stood at 60.6 in February, well above the global average, signaling significant expansion. Moreover, inflation has remained within the Reserve Bank of India's target range, and financial conditions have remained accommodating.

Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at Sovrenn Education 

Regional Growth Dynamics

In its latest South Asia Development Update, the World Bank predicts robust growth of 6 percent for the South Asian region in 2024. India's strong performance is cited as a key contributor to this growth, alongside recoveries in Pakistan and Sri Lanka.South Asia is forecasted to maintain its status as the world's fastest-growing region for the next  two years, with a projected growth rate of 6.1 percent in 2025.

Regional Comparisons

Bangladesh is expected to witness a rise in output by 5.7 percent in FY25, while Pakistan's economy is projected to grow by 2.3 percent during the same period. Sri Lanka's output growth is anticipated to strengthen to 2.5 percent in 2025. 

In summary, the World Bank's optimistic projections underscore India's resilience and potential for sustained economic growth amidst evolving global dynamics.

Also Read: India's Manufacturing Roars: Scaling Heights with 16-Year PMI High in March