New Delhi: The World Bank in its latest India update revised its Financial Year 2024 forecast for the country to 6.3 percent.

This figure is down from its earlier forecast by 6.6 percent in December 2022.

India's GDP growth is expected to be constrained by slower consumption growth and challenging external conditions.
The latest India Development Update, released on April 4 notes that rising borrowing costs and slower income growth are expected to weigh on private consumption growth.

It revealed that Government consumption is projected to grow slower due to the withdrawal of pandemic-related fiscal support measures.

The update notes that the Reserve Bank of India (RBI) has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate. India's financial sector also remains strong, buoyed by improvements in asset quality and robust private - sector credit growth,

Besides, the government is likely to meet its fiscal deficit target of 5.9 percent of Gross Domestic Product (GDP) in this fiscal and combined with the consolidation in state government deficits; the general government deficit is also projected to decline along with the narrowing of the Current Account Deficit ( CAD).

CAD is projected to narrow to 2.1 percent of GDP from an estimated 3 per cent in FY23 on the back of robust service exports and a narrowing goods trade deficit.

The senior economist at World Bank Dhruv Sharma said that Spillovers from recent developments in financial markets in the United States and Europe pose a risk to short term investment flows to emerging markets, including India. But Indian banks remain well capitalised,

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