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India is set to remain the world’s fastest-growing major economy, with a projected steady growth rate of 6.7% over the next three years, according to the World Bank’s latest Global Economic Prospects report released on Tuesday.
The report estimates that India’s growth for the fiscal year 2023/24 (April 2023 to March 2024) has accelerated to 8.2%, which is 1.9 percentage points higher than earlier estimated in January. This surge in growth underscores India’s robust economic trajectory despite global economic headwinds.
Globally, growth is expected to remain steady at 2.6% in 2024, with a slight increase to an average of 2.7% in 2025-26. This rate is significantly lower than the 3.1% average observed in the decade preceding the COVID-19 pandemic. The report highlights that countries comprising over 80% of the global population and GDP will grow more slowly than in the pre-pandemic decade.
In South Asia, regional growth is projected to decelerate from 6.6% in 2023 to 6.2% in 2024, mainly due to a moderation in India’s growth from its recent high levels. Despite this, India’s consistent performance will help maintain regional growth at 6.2% in 2025-26. Other economies in the region, such as Bangladesh, Pakistan, and Sri Lanka, are expected to see robust growth, albeit at varying rates.
India’s economic expansion, while moderating from the high growth rate of FY2023/24, is forecasted to remain strong with an average growth rate of 6.7% for the three fiscal years starting FY2024/25. This moderation is attributed to a slowdown in investment from a high base, although investment growth is anticipated to remain robust, supported by strong public and private investments.
Private consumption is expected to recover due to improved agricultural production and decreasing inflation, while government consumption will grow slowly, aligning with the government’s goal of reducing current expenditure relative to GDP.
The report also notes that global inflation is projected to ease to 3.5% in 2024 and 2.9% in 2025. However, the decline in inflation is slower than previously anticipated, leading central banks to exercise caution in lowering policy interest rates. Consequently, global interest rates are expected to stay relatively high, averaging around 4% over 2025-26, which is about double the average from 2000 to 2019.
In India, inflation has remained within the Reserve Bank’s target range of 2 to 6% since September 2023. However, regional inflation, although below peak levels, remains high due to persistent food supply disruptions and increased energy prices.
India’s continued strong economic performance highlights its resilience and potential as a global economic leader. With strategic investments and supportive policies, India is well-positioned to maintain its growth momentum, contributing significantly to regional and global economic stability.
Sources By Agencies
