THE WORLD BANK has retained its economic growth forecast for India at 6.3% for the current financial year despite expected higher average inflation, which on the other hand could spring positive surprises on fiscal deficit front.
According to the Bank's latest India Development Update, the country's GDP growth for 2023-24 would be 6.3%, the same as the forecast made in April. However, due to spike in food items, the Bank has raised average retail inflation to 5.9% in FY24 from its earlier estimate of 5.2%. The expected growth moderation on year is mainly due to challenging external conditions and waning pent-up demand. However, service sector activity is expected to remain strong with growth of 7.4% and investment growth is also projected to remain robust at 8.9%, it said.
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