The Indian economy is projected to grow at 7.5 per cent in 2024, the World Bank has said, revising its earlier projections for the same period by 1.2 per cent.
World Bank has revised its earlier projections on Indian economy by 1.2 per cent. The bank has now projected Indian economy to grow at 7.5 per cent in 2024. Overall, growth in South Asia is expected to be strong at 6.0 per cent in 2024, driven mainly by robust growth in India and recoveries in Pakistan and Sri Lanka, the World Bank said in its latest South Asia Development Update on Tuesday.
According to Jobs for Resilience, the latest South Asia Development Update released today, South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1% in 2025.
But this strong outlook is deceptive, says the report. For most countries, growth is still below pre-pandemic levels and is reliant on public spending. At the same time, private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population.
According to the report, South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1 per cent in 2025. “In India, which accounts for the bulk of the region’s economy, output growth is expected to reach 7.5 per cent in FY23/24 before returning to 6.6 per cent over the medium term, with activity in services and industry expected to remain robust,” the bank said in its report. In Bangladesh, output is expected to rise by 5.7 per cent in FY24/25, with high inflation and restrictions on trade and foreign exchange constraining economic activity.
Following the contraction in FY22/23, Pakistan’s economy is expected to grow by 2.3 per cent in FY24/25 as business confidence improves. In Sri Lanka, output growth is expected to strengthen to 2.5 per cent in 2025, with modest recoveries in reserves, remittances, and tourism.
“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,” said Martin Raiser, World Bank Vice President for South Asia. “To make growth more resilient, countries need to adopt policies to boost private investment and strengthen employment growth,” he said.
“South Asia is failing right now to fully capitalize on its demographic dividend. This is a missed opportunity,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia. If the region employed as large a share of the working-age population as other emerging markets and developing economies, its output could be 16 per cent higher, Ohnsorge said.