World Bank lowers India’s GDP growth forecast to 6.3% in FY24

New Delhi, Apr 4 (KNN) India is expected to grow at moderate rate of 6.3 per cent in FY24, said the World Bank due to shrinkage in consumption on back of slower income.

The international financial institution has lowered its prediction for India's GDP growth in the current fiscal year from 6.6 per cent.

To tame inflation, the Reserve Bank of India (RBI) has raised interest rates by 250 basis points since May 2022.

"Rising borrowing costs and slower income growth will weigh on private consumption growth," the World Bank said.

Owing to the withdrawal of pandemic-related fiscal support measures government consumption is projected to grow at a slower pace,” said the bank.

The World Bank estimated last fiscal year's growth at 6.9 per cent.

It projected the current account deficit to narrow to 2.1 per cent of gross domestic product for the current fiscal year from an estimated 3 per cent in the previous year, on the back of robust service exports and a narrowing merchandise trade deficit.

Spillover from recent turmoil in financial markets in the United States and Europe pose a risk to short-term investment flows to emerging markets, including India, said World Bank economist Dhruv Sharma.

A surge in India's services exports, which hit a record high in the October-December quarter, is expected to shield the economy from external risks as a slowing global economy will likely weigh on the country's merchandise exports, as per analysts and economists.  (KNN Bureau)