World Bank Predicts India's Strong Economic Growth in 2024 Despite Global Economic Slowdown
Despite a government advance estimate of 7.3% growth in the current financial year, India is expected to maintain its position as the world's fastest-growing major economy.
The World Bank's latest Global Economic Prospects report on Tuesday forecasted sustained robust growth for the Indian economy in the upcoming fiscal year, driven by strong investment and services activity. The projection revised the GDP growth to 6.4% in 2024 and 6.5% in 2025, surpassing the earlier estimate of 6.3% for 2023. Despite a government advance estimate of 7.3% growth in the current financial year, India is expected to maintain its position as the world's fastest-growing major economy.
The report highlighted that while investment may decelerate slightly, it will remain robust due to support from healthy corporate and bank balance sheets, along with public investment. However, the World Bank cautioned about potential impacts on foreign investment in the coming months due to election-related uncertainties. Consumption demand is expected to taper off due to high inflation and a decline in post-pandemic pent-up demand.
Global Economic Prospects also outlined the global economic scenario, projecting a slowdown with estimated global growth rates of 2.4% in 2024. The report emphasized the deceleration in growth rates for advanced economies and China, with China projected to slow down to 4.5% in 2024. Potential downside risks include conflicts in Ukraine and West Asia affecting energy prices, as well as risks to the financial system from higher interest rates, weaker growth in China, and trade fragmentation.
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Despite these challenges, the report suggested a positive outlook for 2025, anticipating a global growth pickup to 2.7%, driven by slowing inflation, declining interest rates, and strengthened trade growth. Additionally, it predicted a potential improvement in global trade in 2024, with a 2.4% expansion, following a sluggish 0.2% growth in the previous year. The report also indicated the expected return of global tourist arrivals to pre-pandemic levels in 2024, albeit with varying recovery rates among countries.
