World Bank projects Indian economy to grow by 7.5% in 2024

NEW DELHI: The World Bank has revised its projection for the Indian economy’s growth in 2024 to 7.5 per cent, up from the earlier estimate of 6.3 per cent.

The overall economic growth in South Asia including countries like Pakistan, Sri Lanka and India, is expected to achieve a growth rate of 6 per cent in 2024. This growth is driven by India’s robust performance and recoveries seen in Pakistan and Sri Lanka.

The World Bank’s report stated, ”In India, which accounts for the bulk of the region’s economy, output growth is expected to reach 7.5 per cent in financial Year 2023-24 before returning to 6.6 per cent over the medium term, with activity in services and industry expected to remain robust.”

The report highlighted that the Bangladesh’s economy is expected to grow by 5.7 per cent in the fiscal year 2024-25. However, high inflation and trade restrictions might limit economic activity in the country.  

Pakistan’s economy is poised to rebound with a growth rate of 2.3 per cent in financial year 2024-25, following a contraction in the previous year.  This growth is attributed to the improvement in business confidence. Similarly, Sri Lanka is expected to see a modest recovery with an output growth of 2.5 per cent in 2025.

While the short-term growth prospects for South Asia seem promising, there are concerns regarding fiscal stability and the increasing impact of climate change on the region.

Martin Raiser, World Bank Vice President for South Asia, mentioned, “South Asia’s growth prospects remain bright in the short run, but fragile fiscal positions and increasing climate shocks are dark clouds on the horizon. To make growth more resilient, countries need to adopt policies to boost private investment and strengthen employment growth.”

“South Asia is failing right now to fully capitalise on its demographic dividend. This is a missed opportunity,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia.