The World Bank on Tuesday projected the Indian economy to grow at a robust 6.6 per cent in 2023-24 (FY24), slowing down from an estimated 6.9 per cent in 2022-23 (FY23), citing “limited spillovers” to Asia’s third-largest economy from a projected global slowdown.
In its Global Economic Prospects, the Bank said global growth may decelerate sharply in 2023 to its third weakest pace in nearly three decades, cautioning that the world economy is “perilously close” to falling into recession.
“Further negative shocks — such as higher inflation, even tighter policy, financial stress, deeper weakness in major economies, or rising geopolitical tensions — could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade,” it warned.
The global economy has been projected to grow by 1.7 per cent in 2023, while the Euro Area and the US are expected to grow at zero per cent and 0.5 per cent respectively during the year.
China’s growth has been projected to pick up to 4.3 per cent in 2023 as the lifting of pandemic restrictions releases pent-up consumer spending.
In 2022, China is expected to have grown at 2.7 per cent in 2022 — the weakest pace since the mid-1970s, except the pandemic year of 2020.
On India, the Bank said the slowdown in the global economy and rising uncertainty would weigh on export and investment growth.
“Governments increasing infrastructure spending and various business facilitation measures, however, will crowd in private investment and support the expansion of manufacturing capacity. Growth is projected to slow, to 6.6 percent in FY23/24 before falling back toward its potential rate of just above 6 per cent. India is expected to be the fastest-growing economy of the seven largest EMDEs (emerging market and developing economies),” it added.
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