India is set to remain the fastest-growing major economy with a steady growth rate of 6.7% over the next three years, according to a World Bank report. For the fiscal year 2023/24, growth is estimated at 8.2%, significantly higher than previous estimates.
Globally, growth is projected to stabilize at 2.6% in 2024 and slightly rise to 2.7% in 2025-26, below the pre-COVID average of 3.1%. In South Asia, growth is expected to slow to 6.2% in 2024 due to a moderation in India’s growth, but will remain steady at 6.2% in 2025-26. Bangladesh’s growth will remain robust but slower, while Pakistan and Sri Lanka are expected to see strengthened growth.
India’s growth moderation is attributed to a slowdown in investment from a high base, although investment growth will remain robust due to strong public and private investments. Private consumption will benefit from a recovery in agriculture and declining inflation, while government consumption growth will be slow as the government aims to reduce current expenditure relative to GDP.
Global inflation is expected to moderate to 3.5% in 2024 and 2.9% in 2025, with global interest rates likely to remain high. In India, inflation has stayed within the Reserve Bank’s target range since September 2023.
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