After higher-than-expected growth in FY23 aided by strong farm sector output and government spending, India’s economic expansion is expected to moderate to 6% in the current financial year on account of weak global demand and the high interest rate that is taking a toll on household consumption, Organisation for Economic Co-operation and Development (OECD) said in its global economic forecast released on Wednesday.
OECD, however, has said moderating inflation and monetary policy easing in the second half of current fiscal will help discretionary household spending to regain momentum, helping the economy to accelerate to 7% growth in FY25, aided by improved global conditions.
OECD’s forecast is lower than RBI’s forecast of a 6.5% expansion this fiscal. While the International Monetary Fund had in April forecast a 5.9% growth for India this year, the World Bank on Tuesday said India is expected to grow at 6.3% in the year ending March 2024.
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