The World Bank (WB) improves its forecast for Indian economic growth in the current fiscal year to 6.9% from 6.5% against the backdrop of rising consumer spending and increased economic activity within the country. India is well positioned to avoid external financial shocks, according to the WB report.
India's GDP in the second financial quarter (July-September) grew by 6.3% in annual terms. Although the growth rate of the indicator has slowed down compared to 13.5% in the previous quarter, India has still managed to fence itself off from the recession that threatens some other countries of the world, WB economists noted.
At the same time, the organization expect that the impact of global economic problems on the country's economy will increase in the next fiscal year. India's FY2024 GDP growth forecast has been downgraded to 6.6% from 7%.
At the same time, experts expect India's budget deficit to gradually narrow over the next few years due to improved tax collection efficiency. According to WB Lead Economist Druv Sharma, the authorities will be able to achieve the target budget deficit-to-GDP ratio of 6.4% already this year.
The WB forecast for inflation in India in the current fiscal year is 7.1%, in 2024 financial year – 5.2%. Meanwhile, since the beginning of 2022, inflation in the country has exceeded the upper limit of the Indian Central Bank's target range of 6%. In October, consumer prices rose by 6.77% in annual terms, the lowest rate in three months.