India's growth to remain robust, global economy to slow in 2024: World Bank

NEW DELHI: The World Bank said on Tuesday that growth in the Indian economy is expected to remain strong in the next few years fiscal yeardriven by robust investment and services activity.
Contrary to its forecast of 6.3% growth in 2023, most recently Global economic outlook has now forecast GDP growth of 6.4% in 2024 and 6.5% in 2025. The government's advance estimate released on Friday expects the Indian economy to grow by 7.3% in the current fiscal year. At the projected growth rate, India will retain its crown as the world's fastest growing major economy.
The multilateral agency said that while investment will decline slightly, it will remain robust thanks to support from healthy corporate and bank balance sheets as well as public investment. This will come despite the World Bank expecting consumer demand to weaken due to high inflation and a decline in pent-up demand following the pandemic. In the coming months, the uncertainty surrounding the election could impact foreign investment, they warned.

GDP growth (%)
Year 2023 2024 2025
World 2.6 2.4 2.7
India 6.3 6.4 6.5
China 5.2 4.5 4.3
Russia 2.3 1.6 0.9
South Africa 0.7 1.3 1.5
Brazil 3.1 1.5 2.2
US 2.5 1.6 1.7
Euro area 0.4 0.7 1.6

Source: World Bank Global Economic Prospects
The World Bank estimates that global growth is expected to slow to 2.4%, marking the third consecutive year of slowdown. “Growth rates in advanced economies overall and in China are expected to slow in 2024 and be well below their average levels from 2010 to 2019,” it said. China is expected to slow to 4.5% in 2024.
The report warned of downside risks from conflicts in Ukraine and West Asia putting pressure on energy prices, as well as risks to the financial system from higher interest rates, weaker growth in China and trade fragmentation. Although commodity prices cooled in 2023, they remained 40% above pre-pandemic levels. While oil prices are expected to fall to $81 a barrel due to weak growth in China, the World Bank warned of the negative impact of recent attacks in the Red Sea.
Global growth is expected to rise to 2.7% in 2025 as inflation is expected to slow, interest rates fall and companies see trade growth.
There may finally be some good news on trade in 2024, which is expected to grow 2.4% after growing 0.2% – the slowest non-recession growth in 50 years. Global tourist arrivals are expected to return to pre-pandemic levels in 2024, although the recovery is expected to lag in some countries where reopenings have been delayed.