India's GDP Growth To Slow Down To 6.3 Per Cent In FY24: World Bank

India's inflation, according to the report India Development Update, to moderate from 6.6 per cent to 5.2 per cent in the current fiscal year.

The Economic Survey had projected growth of 6.5 per cent for the current fiscal while the RBI's latest projection pegs growth for FY24 at 6.4 per cent. ( Image Source :Getty )

World Bank in its latest report on Tuesday said that India' economy is expected to slow in the current fiscal to 6.3 per cent on the back of shrinkage in consumption due to slower income growth.

India's inflation, according to the report India Development Update, to moderate from 6.6 per cent to 5.2 per cent in the current fiscal year. It also pointed out that the Current Account Deficit (CAD) is expected to be 5.2 per cent in FY24, amid easing global commodity prices and moderation in domestic demand.

The Economic Survey had projected growth of 6.5 per cent for the current fiscal while the RBI's latest projection pegs growth for FY24 at 6.4 per cent.

"The Reserve Bank of India (RBI) has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate. India's financial sector also remains strong, buoyed by improvements in asset quality and robust private - sector credit growth," the report stated.

"The actual outcome for real GDP growth will probably lie in the range of 6.0 per cent to 6.8 per cent, depending on the trajectory of economic and political developments globally," the survey had said.

CRISIL has pegged India's growth in FY24 at 6 per cent due to a challenging global macroeconomic environment.

Augusto Tano Kouame, World Bank's country director in India, said, "The Indian economy continues to show strong resilience to external shocks."

Meanwhile, the Asian Development Bank (ADB) projects growth in India’s gross domestic product (GDP) to moderate to 6.4 per cent in FY23 ending on March 31, 2024 and rise to 6.7 per cent in FY24, driven by private consumption and private investment on the back of government policies to improve transport infrastructure, logistics, and the business ecosystem.

The projection is part of the latest edition of ADB’s flagship economic publication, Asian Development Outlook (ADO) April 2023, released on Tuesday.

The growth moderation for India in FY23 is premised on an ongoing global economic slowdown, tight monetary conditions, and elevated oil prices. However, FY24 is expected to see faster growth in investment, thanks to supportive government policies and sound macroeconomic fundamentals, lower nonperforming loans in banks, and significant corporate deleveraging that will enhance bank lending, according to ADO April 2023.