The World Bank has slightly raised its forecast for India’s economic growth in the current financial year to 6.6%, up from the 6.5% projected in its January update.
In its assessment, the Bank said consumer demand could remain firm in the first few months of the year, supported by the impact of a GST reduction. However, it cautioned that spillovers from the West Asia conflict could affect the growth outlook.
For the previous financial year, the World Bank expects India’s economy to have grown by 7.6%, citing strong domestic demand and improved exports. It said growth is likely to moderate to 6.6% in the current year amid external risks.
The report noted that rising international fuel prices could add to inflation and reduce households’ spending capacity. It also said government consumption may come under pressure if higher allocations are needed for subsidies on cooking gas and fertilisers.
The Bank added that elevated global uncertainty and higher input costs could lead to a slight slowdown in investment growth during the year.
