The World Bank revised its growth forecast for India in the current fiscal year to 6.9% from 6.5%, led by expected higher consumption and more robust domestic activity, which will help the country perform better than other emerging markets.
A report released by the World Bank on Tuesday said India is well-positioned to navigate external financial shocks. The country’s gross domestic product grew 6.3% in the July to September period—a decline from last quarter’s 13.5%—and has so far buffered itself from recessionary shocks facing other parts of the world.
The bank said global economic headwinds will likely take a toll on the country’s finances next year. It also changed its forecast for the financial year 2024, lowering it to 6.6% from 7%.
In a media briefing, World Bank senior economist Dhruv Sharma said that India’s overall fiscal deficit is expected to gradually decline over the next few years led by more efficient tax revenue collection. He added that the country is on track to meet its fiscal deficit target of 6.4% of GDP in the current financial year, while the general government deficit is expected to reduce to 9.6%. He underlined that the World Bank has no concerns about India’s debt sustainability at this stage.