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Roving Periscope: During Modi 3.0, India to remain the world’s fastest-growing economy

Roving Periscope: During Modi 3.0, India to remain the world’s fastest-growing economy

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Virendra Pandit

New Delhi: The Prime Minister Narendra Modi-led NDA government, which kicked off on a positive note for a third consecutive term of five years on June 9, is likely to lead India’s economic success on a global scale in the coming years, according to various growth projections.

After the United Nations recently upgraded the world’s largest democracy’s economic growth projections for 2024 from 6.2 percent to 6.9 percent, the World Bank has also upwardly revised its GDP growth forecast for FY25 by 20 basis points from 6.4 percent in January to 6.6 percent now.

The World Bank said India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate, the media reported on Wednesday.

In its latest Global Economic Prospects report, the global financial institution attributed the revision in India’s growth projections to strong public investment accompanied by private capex and a rise in private consumption.

Growth in India’s industrial activity, including manufacturing and construction, was stronger than expected, alongside resilient services activity, which helped offset a slowdown in agricultural production partly caused by monsoons.

Domestic demand’s growth remained robust, with a surge in investment, including in infrastructure, offsetting a moderation of consumption growth as post-pandemic pent-up demand eased.

For 2025-26 also, the WB raised the growth projections from 6.5 percent to 6.7 percent.

“India’s economy has been buoyed by strong domestic demand, with a surge in investment, and robust services activity. It is projected to grow an average of 6.7 percent per fiscal year from 2024 through 2026–making South Asia the world’s fastest-growing region,” the report said.

GDP per capita in the Emerging Market and Developing Economies (EMDEs), which include India, is forecast to grow at about 3 per cent on average over 2024-26, well below the average in 2010-19. “Some large EMDEs, such as India, are expected to see continued solid per capita growth,” it said.

Activity in commodity importers, excluding China, has been robust. “This mostly reflects resilience in some large economies, notably India, owing to continued strength in domestic demand. Growth has been more muted in other commodity importers so far this year.”

According to India’s official data, its GDP grew at an impressive 8.2 percent during 2023-24, and the country remained the fastest-growing major economy, at 7.2 percent in 2022-23 and 8.7 per cent in 2021-22, respectively.

The Reserve Bank of India (RBI), in its latest monetary policy meeting, raised the GDP forecast for 2024-25 from 7 percent earlier to 7.2 percent now.

Morgan Stanley forecasts 6.8 percent growth in India in 2024. Also, India will remain the fastest-growing among major economies in 2024, according to the latest International Monetary Fund’s World Economic Outlook, which raised the country’s growth projections for 2024 from 6.5 percent to 6.8 percent.

The United Nations recently upwardly raised India’s economic growth projections for 2024 from 6.2 percent to 6.9 percent mainly driven by strong public investment and resilient private consumption.

Moody’s Ratings expects India to grow at 6.6 percent in 2024-25. The Organisation for Economic Co-operation and Development (OECD) also projects India to grow 6.6 percent in the next two years.

The Asian Development Bank (ADB) upgraded India’s GDP growth forecast for 2024 from 6.7 percent to 7 percent.


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