World Bank lowers India’s GDP forecast for the new financial year to 6.3%

The World Bank said in a report on Tuesday that India’s GDP is expected to decline to 6.3 per cent in FY2024 due to a slowdown in consumption. Earlier the country’s GDP was estimated to be 6.6 percent. The World Bank in its India Development Update has said that slow growth in consumption and challenging external conditions are likely to constrain growth.

GDP can be affected due to costlier debt and slow growth in income

“Easier debt and slower income growth will weigh on private consumption growth. Government consumption is also expected to slow growth due to the withdrawal of pandemic-related fiscal support measures,” the report said. In the report, the current account deficit has been estimated to come down to 2.1 percent in FY24, which was three percent in the last financial year. A World Bank report on inflation said it will come down to 5.2 per cent from 6.6 per cent in the just-concluded fiscal year.

The ongoing turmoil in the market of America and Europe poses a risk to the Indian market

According to analysts and economists, India’s services exports reached a record high in the October-December quarter, helping the economy hedge against external risks as a slowing global economy is expected to hit the country’s merchandise exports. According to media reports, service sector exports are no longer being driven by IT services alone, but also by more lucrative propositions such as consultancy and research and development.