The World Bank on Tuesday cut India’s growth forecast for 2023-24 to 6.3% from its December estimate of 6.6% amid global headwinds and with rising borrowing costs and slower income growth leading to a moderation in consumption.
Meanwhile, the Asian Development Bank (ADB) on Tuesday said that India’s economy would grow at a slower-than-expected 6.4% this year. The growth estimates by both multilateral agencies are close to the Reserve Bank of India’s (RBI) February 8 forecast of 6.4% growth in 2023-24. The Economic Survey on January 31 projected India’s GDP growth at 6.5% in real terms , with a broader range of 6-6.8% depending on downside and upside risks.
Experts expect the Monetary Policy Committee of the Reserve Bank of India (RBI), which is holding its bi-monthly meeting from April 3-6 to raise policy rates for the seventh time to reduce inflation, which remains over the central bank’s upper tolerance limit of 6%. A recent spike in international crude oil prices is one of the major worries for experts as India is a net importer of energy.
The report said the reopening of China’s economy and stronger than expected growth in the United States and Euro area at the end of 2022 are providing some tailwinds to growth in 2023. “Although significant challenges remain in the global environment, India was one of the fastest growing economies in the world with real GDP growing 7.7 percent year-on-year during Q1-Q3 fiscal year 2022/23 (April-March FY22/23)… While the overall growth momentum remains robust and real GDP growth for FY22/23 is estimated to be 6.9 percent, there were signs of moderation in Q3 as growth slowed to 4.4 percent year-on-year,” it said.