The World Bank forecasts India's output growth to reach 7.5 per cent in FY24, driven by resilient activity in services and industry. However, growth is expected to moderate to 6.6 per cent over the medium term. The expected slowdown mainly reflects a deceleration in investment from its elevated pace in the previous year.
Over the medium term, the fiscal deficit and government debt in India are projected to decline, supported by robust output growth and consolidation efforts by the central government.
India's economic activity in 2023 Q4 exceeded expectations, with an 8.4 per cent growth compared to the previous year, supported by increased investment and government consumption.
India's composite purchasing managers index (PMI) stood at 60.6 in February, well above the global average of 52.1, indicating expansion. Inflation has remained within the Reserve Bank of India's (RBI) target range, and financial conditions have remained accommodative.
Domestic credit issuance to the commercial sector grew by 14 per cent year-on-year (YoY) in December 2023, with financial soundness indicators showing improvement. Foreign reserves increased by 8 per cent in the year to January 2024.
