World Bank cuts India's GDP growth forecast to 6.3% from 6.6% for FY24

The World Bank cuts its 2023-24 (FY24) real gross domestic product (GDP) growth forecast for India to 6.3%, from an earlier estimate of 6.6%, due to global spillovers, monetary policy tightening and slower consumption growth.

The India Development Update by the World Bank stated that the country’s retail inflation will see a moderation from 6.6% to 5.2% in FY 2023-24. The World Bank update added that India’s Current Account Deficit (CAD) expected to be at 5.2% in FY24.

Rising borrowing costs and slower income growth will weigh on private consumption growth, the World Bank said in a report.

It also highlighted that the Government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures.

" Despite the overall resilience of the economy, there are significant headwinds to growth in FY23/24. The recent turmoil in the financial sector in the US and Europe may have adverse spill overs for the global financial markets through increased volatility and reduced risk appetite for emerging market assets," said the World Bank in its report.