Sure, here is your article.
World Bank Upgrades India’s Economic Growth Forecast
In its latest India Development Report titled ‘Navigating the Storm’, the World Bank has upgraded India’s economic growth forecast for 2022-23 to 6.9%. This modification comes after the bank had revised down India’s Gross Domestic Product (GDP) growth forecast to 6.5% in October 2022 from an earlier prediction of 7.5%.
Growth Projections and Drivers
The World Bank anticipates the Indian economy to expand at a marginally slower pace of 6.6% in 2023-24, due to challenging global factors which can potentially influence its economic outlook through various channels. However, the report highlights India’s resilience in economic activity despite a deteriorating external environment. The strong macroeconomic fundamentals of the Indian economy have positioned it favorably compared to other emerging markets. Factors contributing to this robustness include strong private consumption and focused government initiatives on capital expenditure, which fuelled domestic demand in the first half of 2022-23.
India’s Internal Strengths
India’s sizeable domestic market and the nation’s limited exposure to international trade flows have been advantageous. Coupled with continued robust growth of domestic demand at the beginning of Q3 (October to December quarter), 2022-23, these factors have fortified India’s economy. Moreover, a well-crafted and prudent policy response to global spillages is helping India navigate global and domestic challenges effectively.
Challenges Ahead
Despite the positive outlook, several challenges remain. Factors such as effects of a tightening global monetary policy cycle, decelerating global growth, and raised commodity prices will potentially impact domestic demand, especially private consumption in FY2023/24. Moreover, slowing global growth might curb the growth in demand for India’s exports. These elements indicate that India’s economy might witness lower growth in FY23 compared to FY22.
World Bank’s Suggestions
In its report, the World Bank proposed that sectors like renewable energy and the green economy have the potential to create numerous jobs. However, it also warned about the trade-offs between trying to curb the adverse impact of global spillovers on growth and the available policy space.
About the World Bank
Founded in 1944, the World Bank, initially known as the International Bank for Reconstruction and Development (IBRD), operates alongside the International Monetary Fund (IMF). It evolved into a unique global partnership of five institutions working towards sustainable solutions to alleviate poverty and promote shared prosperity in developing countries. With 189 member countries, including India, the World Bank is recognized as one of the United Nations’ specialized agencies. Key reports published by the bank include the Human Capital Index and the World Development Report.
UPSC Civil Services Examination Information
In the previous years’ questions for the UPSC Civil Services examination, there was a query about India’s ranking in the ‘Ease of Doing Business Index’. The World Bank, which used to publish this index, was the correct answer to this question.