The World Bank has raised India’s GDP growth forecast for 2023-24 up by 1.2 percentage points to 7.5%, but warns that the nation and its neighbors, Pakistan and Bangladesh, may lose out on chances afforded by the demographic dividend or a larger share of the young.
The economy will rise by 6.6% in FY25.
The World Bank expects India’s GDP to decelerate to 6.6 percent in 2024-25 due to weaker investments than the previous year.
Lower investments will be largely compensated by a reduction in the budget deficit and government debt.
The World Bank boosted India’s GDP prediction on the basis of strong activity in services and industries. Bangladesh’s GDP is predicted to expand by 5.6%, and Pakistan’s by 1.8%, after a decline in 2022-23.
In its most recent South Asia update, the World Bank reported that the region’s employment ratio was decreasing. This implies that the three nations are failing to create enough jobs for their young people, putting their demographic dividend at danger. South Asia was “the only region where the share of working-age men who are employed fell over the past two decades,” according to the World Bank. The World Bank’s massive adjustment of India’s GDP growth follows an impressive 8.4% growth rate in the October-December quarter. The January-March Gross Domestic Product growth statistics are also expected to be in the 8% level.
However, it expects growth to decrease to 6.6 percent in 2024-25 due to smaller investments than the preceding year. Lower investments would be largely compensated by a reduction in the budget deficit and government debt. Aside from India, the remainder of South Asia will have robust development, with a total rate of 6.1% in 2024-25. Bangladesh’s GDP will increase by 5.7%, Pakistan’s by 2.3%, and Sri Lanka’s by 2.5% over this time period.
The World Bank has cautioned that India and its neighbors are not providing enough employment to maintain their youthful population, putting the region’s demographic dividend at danger while enjoying the world’s fastest economic development.
