Indian Economy To Surge By 7.5% In 2024: World Bank

The projection for the Indian economy to grow at 7.5 percent in 2024 has been announced by the World Bank, with a revision of its earlier projections for the same period by 1.2 percent. The latest South Asia Development Update was published by the World Bank on Tuesday where it was stated that the overall growth in South Asia is expected to be strong at 6.0 percent in 2024, primarily driven by robust growth in India and recoveries in Pakistan and Sri Lanka.

It has also been mentioned in the report that South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1 percent in 2025, as reported by Hindustan Times.

Indian Economy To Surge By 7.5% In 2024: World Bank

The report further stated that in India, which accounts for the bulk of the region's economy, output growth is expected to reach 7.5 percent in FY23/24 before returning to 6.6 percent over the medium term, with activity in services and industry expected to remain robust, reported by Hindustan Times.

Meanwhile, in Bangladesh, output is expected to rise by 5.7 percent in FY24/25, with high inflation and restrictions on trade and foreign exchange constraining economic activity.

It has been mentioned that following the contraction in FY22/23, Pakistan's economy is expected to grow by 2.3 percent in FY24/25 as business confidence improves.

In Sri Lanka, output growth is expected to strengthen to 2.5 percent in 2025, with modest recoveries in reserves, remittances, and tourism.

Martin Raiser, World Bank Vice President for South Asia, said, "South Asia's growth prospects remain bright in the short run, but fragile fiscal positions and increasing climate shocks are dark clouds on the horizon." He further added, "To make growth more resilient, countries need to adopt policies to boost private investment and strengthen employment growth," as reported by Hindustan Times.

Notably, Franziska Ohnsorge, World Bank Chief Economist for South Asia, has expressed concerns by stating, "South Asia is failing right now to fully capitalize on its demographic dividend. This is a missed opportunity." It has been reported that in India, economic activity surprised on the upside in 2023Q4, with growth of 8.4 percent from a year ago, supported by rapid increases in investment and government consumption.

Additionally, it has been stated that financial conditions in India have remained accommodative, with domestic credit issuance to the commercial sector growing by 14 percent (year-on-year) in December 2023, the fastest pace since 2013.