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World Bank Forecasts India’s GDP Growth At 6.3% For FY24

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In its report, the global banking institution stated that despite significant global challenges, India was one of the fastest-growing major economies in FY 2022-23 at 7.2 per cent

 

World Bank forecasted India’s GDP growth at 6.3 per cent for FY23-24 despite global headwinds on Tuesday. The Bank also projected that India’s service sector activity will remain strong with growth at 7.4 per cent and added that investment growth will remain robust at 8.9 per cent in the current fiscal year.

In its India Development Update (IDU), the global banking institution stated that despite significant global challenges, India was one of the fastest-growing major economies in FY 2022-23 at 7.2 per cent. India’s growth rate was the second highest among G20 countries and it was nearly double the average for emerging market economies.

According to the research, India’s bank loan growth surged to 15.8 per cent in the first quarter (April-June 2023) of the current fiscal year, up from 13.3 per cent in the first quarter of FY2022-23.

“In the short term, an unfavourable global climate will continue to provide issues…Capturing public spending to attract more private investment will create more favourable conditions for India to exploit future global possibilities,” stated Auguste Tano Kouame, World Bank Country Director in India.

Furthermore, the forecast said that India’s fiscal deficit will fall to 5.9 per cent from 6.4 per cent. The central government fiscal deficit is expected to fall further, from 6.4 per cent to 5.9 per cent of GDP. The public debt is forecast to level off at 83 per cent of GDP and the current account deficit is forecast to fall to 1.4 per cent of GDP.

On inflation, the report projected that it will decrease gradually as food prices normalise and government measures increase the supply of key commodities.

The IDU also added that the volume of foreign direct investment will grow in India due to the rebalancing of the global value chain.

wb meetings

Upcoming WB-IMF Annual Meeting To Focus Upon “Eradicating Poverty”

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World Bank-IMF annual meetings is scheduled to take place from 9 to 15 October this year. The focus of the meeting will be on ‘what it will take to eradicate poverty on a sustainable planet’.

It will also examine the new strategy required to address interconnected global concerns including the solutions that worked on the ground in developing countries and plans to boost jobs, digital infrastructure, and climate action.

Ajay Banga, president of the World Bank, is one of the individuals scheduled to participate in the discussions. According to Ajay Banga, “The Bank’s twin goals have to change to be the elimination of poverty, but on a liveable planet, because of the interconnected nature of our crisis,” posted World Bank on X.

Banga also emphasised the need for a change in priorities towards eradicating poverty while maintaining a liveable world in his remarks on the relevance of these sessions. He highlighted that a comprehensive strategy that takes into account climate action, pandemic response, and fragility addressing is required due to the interconnected nature of global problems.

The World Bank invites participants in these debates from all over the world. The meetings will be streamed live online, giving participants the opportunity to participate in English, Arabic, French, and Spanish and planned to be broadcasted live from Marrakech, Morocco. 

economy

Indian Economy Likely To Grow 6.9% This Year: World Bank

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India is affected by spillovers from the United States (US), Euro area and China, according to the World Bank’s India Development Update

Amid the fear of a global recession and economic growth slowdown, World Bank on Tuesday revised its gross domestic product (GDP) growth estimate for India to 6.9 per cent for 2022-23 from 6.5 per cent earlier.

India is affected by spillovers from the United States (US), Euro area and China, according to the World Bank’s India Development Update.

The global body, however, saw the government meeting the fiscal deficit target of 6.4 per cent of the GDP in 2022-23.

World Bank estimated inflation at 7.1 per cent in the current fiscal year.

Meanwhile, Chief Economic Advisor (CEA), V Anantha Nageswaran said that the Indian economy is on track to achieve 6.8 to 7 per cent GDP growth in FY23.

“Q2 GDP (growth) was in line with most market participants’ expectations. In 2022-23, the economy is on track to achieve 6.8-7 per cent growth,” Nageswaran said.

nirmala sitharaman

FM Sitharaman Urges For Effective Tax Reporting Regime On Crypto Assets

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Highlighting the need to boost the private sector participation, on increasing the sustainable and digital infrastructure investments, she also emphasised on mobilising finance at sub-national level for inclusive and quality infrastructure

Finance Minister Nirmala Sitharaman urged for an effective tax reporting regime and information exchange between jurisdictions on 13 October. This to combat offshore tax evasions for crypto assets.

On the side-lines of the annual meetings of the International Monetary Fund (IMF) and the World Bank, Sitharaman critically noted a number of critical issues, including infrastructure, investments and international taxation. She participated in the G20 Finance Ministers and Central Bank Governors meeting too.

Highlighting the need to boost the private sector participation, on increasing the sustainable and digital infrastructure investments, she also emphasised on mobilising finance at sub-national level for inclusive and quality infrastructure.

Discussions were held, on the progress made on international taxation agenda in this year, during last session of the ongoing G20 meeting.

Addressing on the two-pillar solution, Sitharaman urged for participative engagement of all jurisdictions in negotiations and prioritise capacity building. She further added that international tax rules must be simple and easy to understand, administrable and should generate meaningful revenue in the developing countries.

According to multiple tweets by the Ministry of Finance, the minister also urged for an effective tax reporting regime and information exchange between jurisdictions in order to combat offshore tax evasion for crypto assets.

nirmala sitharaman

Sitharaman To Attend IMF-World Bank Annual Meetings

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She will take part in bilateral meetings with several countries like Japan, South Korea, Saudi Arabia, Australia, Bhutan, New Zealand, Egypt, Germany, Mauritius, UAE, Iran and Netherlands

Union Finance Minister Nirmala Sitharaman will travel to the United States on October 11 to attend the annual meetings of the International Monetary Fund (IMF) and the World Bank. 

The Ministry of Finance on Monday in a statement said that Sitharaman will attend the G20 finance ministers and central bank governor (FMCBG) meetings.

She will take part in bilateral meetings with several countries like Japan, South Korea, Saudi Arabia, Australia, Bhutan, New Zealand, Egypt, Germany, Mauritius, UAE, Iran and Netherlands. 

The minister will also hold one-on-one meetings with leaders and heads of OECD, European Commission and UNDP, the ministry added. 

In a high-level meeting, the Finance Minister will meet the US Treasury Secretary  Janet Yellen and David Malpass, President of the World Bank separately to discuss issues of mutual interest.

The Union Finance Minister will also attend roundtable meetings with USIBC and USISPF on themes to ‘Strengthen Investment and Innovation in India-US Corridor’ and “Investing in India’s Digital Revolution”. 

These meetings with leading business leaders and investors are aimed at highlighting India’s policy priorities and deliberating on measures to facilitate foreign investment by showcasing India’s attractiveness as an investment destination, it said. 

world bank

World Bank Curtails India’s GDP Growth Forecast By 1% For 22- 23

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World Bank warns on the repercussions of the Russia-Ukraine war and said global monetary tightening will burden the economic outlook.

The World Bank curtail its growth forecast for India for 2022-23, on 6 October. It cut down to 6.5 per cent year-on-year from a previous estimate of 7.5 per cent.

Furthermore, along with warning about the repercussions of the Russia-Ukraine war and it said global monetary tightening will burden the economic outlook.

“Private investment growth is likely to be dampened by heightened uncertainty and higher financing costs,” the World Bank quoted in its twice-a-year report on South Asia.

Also, it noted that the country’s exports would be impacted due to slowing global demand.

world bank

World Bank’s India head appointed Vice President

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Ahmad, who as Vice President of, Operations would head the Multilateral Investment Guarantee Agency (MIGA), is only the second Bangladeshi national to be appointed to such a high position in the history of the bank.

The World Bank’s India head Junaid Kamal Ahmad has been appointed as the Vice President of the international lending institution.

Ahmad, who as Vice President of, Operations would head the Multilateral Investment Guarantee Agency (MIGA), is only the second Bangladeshi national to be appointed to such a high position in the history of the bank. Ahmad will assume his new role from April 16, an official release said.

Faisal Chaudhary was the first Bangladeshi national who became the vice president on the operational side.

In this role, Ahmad will work to advance and enhance MIGA’s brand partnering across the World Bank Group and with financial institutions, private investors and development actors; originate and pursue meaningful, impact-driven projects and lead the Operations team to deliver on MIGA’s mandate of mobilising private finance for development projects in Emerging Market Developing Economies, the bank said in a statement.

“Our (World Bank’s) partnership with India is allowing us to learn and to share the learnings around the world. The most important is, as India’s economic development happens, the impact on global growth and poverty is very important,” Ahmad, who has been the country director for the World Bank in India since September 2016, told PTI in an interview.

“So, a country director of India overseeing such a program really is someone who is able to then begin to think about more leadership roles within the World Bank. So, the experience of India has been extremely important in offering me that experience and that perspective,” he said in response to a question.

Ahmad noted that the challenge in financing development is one of mobilising long-term capital markets.

“If you look at the challenges of development, whether it’s dealing with the pandemic, dealing with climate change, dealing with infrastructure, all of this will require long-term money,” he said.

“The money that’s needed is far more than what public finance can give. So, the name of the game is turning into how do you leverage public finance to bring in long-term capital into development. The way to do it is to de-risk development,” he said.

In its statement, the bank said Ahmad brings to this post deep experience and understanding of international development and an exemplary track record of thought leadership and service to World Bank Group client countries.

PTI

economy

Retail Inflation At 6.01%

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The wholesale level of Inflation in January relaxed to 12.96 percent from 13.56 percent a month prior. Wholesale food inflation was at a two-year high of 9.6 percent.

Amid the ongoing COVID-19 pandemic, retail inflation in India rose to a seven-month high of 6.01 percent in January, penetrating the upper resilience level of the medium-term inflation focus of 4+/ – 2 percent set by the Reserve Bank of India (RBI), basically by virtue of high food inflation, which leaped to a 14-month high of 5.43 percent, alongside a troublesome base.

Kaushik Basu, professor of Economics at Cornell University and former Chief Economist of the World Bank has tweeted on the rising Inflation that is affecting ordinary people and their livelihood. 

Basu tweeted, “Now India’s retail inflation is also rising. In January it breached the 6% mark & was at a 7-month high. Matters are however worse for ordinary people because “household goods & services inflation” is at 7.1% which is a 94-month high.”

The wholesale level of Inflation in January relaxed to 12.96 percent from 13.56 percent a month prior however denoted the 10th successive month of being in double digits. Wholesale food inflation was at a two-year high of 9.6 percent.

Supriya Srinate, National spokesperson and Member Coordination Group, INC, India Maharajganj, UP also slammed BJP and wrote, India’s WPI inflation consistently rising now at 20 years high. Retail #inflation above 6% at a 7 month high. This while gas petrol diesel prices on hold due to polls. Income drop for 84 percent of Indians, income halved for 15 crore families. What does this mean for them, Narendra Modi?

However, a rise in inflation can cause a tough livelihood for common people in India. It can disrupt purchasing power. Since inflation disintegrates the worth of money, it urges customers to spend and stock on things that are slow to become of less value.

The Congress in regard to this has tweeted that India’s retail inflation touched 6.01 percent in January 2022, the highest in 7 months. After record unemployment and declining incomes, back-breaking inflation is yet another gift from the Modi government.

economy

India’s Growth Is Turning Positive: Former World Bank Economist

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The economy is likely to register a 9.5 per cent growth this fiscal over the 7.3 per cent contraction last year, as the ongoing recovery is faster and more credible than earlier foreseen, according to a foreign brokerage report.

India’s growth is at last turning positive which is a good sign, said Kaushik Basu, former Chief Economist at the World Bank, said on Monday. 

According to the UBS-India Activity indicator,  the economic activity has improved by an average of 16.8 percent quarter-on-quarter (QoQ) sequentially in the September quarter due to ease in lockdown restrictions, which led to the economic recovery post the second wave. 

“India’s growth is at last turning positive. This is good news but we must realize that growth in recent years has been driven almost entirely by the top 1 percent. The share of the wealth of the bottom 50 percent has shrunk sharply. This is disappointing and needs urgent policy correction,” Basu wrote in his official Twitter handle. 

The economy is likely to register a 9.5 percent growth this fiscal over the 7.3 percent contraction last year, as the ongoing recovery is faster and more credible than earlier foreseen, according to a foreign brokerage report.

It will gather more momentum in the second half of the current fiscal, but will slow down to 7.7 percent next financial year, it added. The government has budgeted for a 10.5 percent growth this fiscal, but the Reserve Bank has scaled it down to 9.5 percent. Ravaged by the pandemic, the economy tanked 7.3 percent last fiscal, the worst and the third contraction on record.

Swiss brokerage UBS Securities India expects the economy to gain momentum in the second half on cyclical tailwinds, including pent-up demand and favourable external demand.

We expect real GDP to grow at 9.5 per cent in FY22, but to lose the momentum to 7.7 per cent next fiscal. We expect growth to gain momentum in the second half on cyclical tailwinds including pent-up demand, especially after more people are vaccinated, favourable external demand as exports are over 25 per cent the pre-pandemic level) and higher government spending and the likely resultant spike in Capex, Tanvee Gupta Jain, chief economist at UBS Securities India said in a report on Monday. However, she said that the recent supply-side disruptions, including high global commodity prices, especially oil and domestic coal shortages, could weigh on the fragile recovery.

The report is based on a survey among the key policymakers who are more optimistic now and expect the real GDP growth to surprise well on the upside.

(With PTI inputs)

Rbi cfo

India To Remain Accommodative In Its Monetary Policy: RBI Gov

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India is witnessing a very robust economic recovery, but there is still unevenness across sectors, RBI Governor Shaktikanta Das said in his address to the annual meeting of the International Monetary Fund and the World Bank. Video of the excerpts of his speech were posted and released by the IMF.

India, which is experiencing robust economic recovery which remains uneven across sectors, has decided to remain accommodative in its monetary policy, the Reserve Bank of India Governor told the international community on Thursday.

India is witnessing a very robust economic recovery, but there is still unevenness across sectors, RBI Governor Shaktikanta Das said in his address to the annual meeting of the International Monetary Fund and the World Bank. Video of the excerpts of his speech was posted and released by the IMF.

“We have therefore decided to remain accommodative in our monetary policy while being closely watchful of the evolving inflation scenario,” Das said in the short video.

(PTI)

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