India's economy 'resilient,' to grow 6.9% in FY23: World Bank
Upgrading India's gross domestic product (GDP) forecast from 6.5% to 6.9% for the current fiscal year, the World Bank on Tuesday termed India's economy as "more resilient" than 10 years ago. Senior World Bank economist Dhruv Sharma said India hasn't fared "that badly" in contrast to other emerging economies while also noting that the Indian rupee depreciated by just about 10% this year.
Why does this story matter?
- In October, the International Monetary Fund (IMF) said India's economic growth was improving despite a global economic slowdown and fears of an impending recession.
- Following the COVID-19 pandemic, the global economic crisis was precipitated by the Russia-Ukraine war and rising US interest rates, which escalated fuel and other import prices.
- However, while most economies are slowing down, India is in a "relatively bright spot."
Steps taken in last 10 years helping India: World Bank
On the Indian economy, Sharma said, "All steps taken over the past 10 years are helping India navigate the global headwinds." Against the backdrop of the pandemic and the Russia-Ukraine crisis, he attributed the revival of the economy to "robust domestic demand." He further dismissed fears about India's debt sustainability, saying it was far less affected by the global economic slowdown than its peers.
World Bank's India director praised Modi government
Meanwhile, the World Bank's Country Director for India, Auguste Tano Kouame, praised the Narendra Modi government for taking steps to make the economy resilient and putting efforts into making it more dynamic. Though the World Bank raised India's forecasted rate of growth for the Financial Year 2023 (FY23), the expectation for the next fiscal year was cut down from 7% to 6.6%.
Retail inflation to be at 7.1% in FY23
In its India Development Update, the World Bank predicted inflation to be at 7.1% in FY23, owing to a fall in commodity prices. It also said India was on course to meet its 6.4% fiscal deficit target. India's GDP was at 6.3% in the September quarter due to a contraction in manufacturing output, as opposed to 8.4% in the corresponding period a year ago.