The World Bank has published a report on India’s economic growth. The report predicts that India’s economy will grow between 6.3% and 6.6% this financial year. The report also states that customers will face higher borrowing costs, which will affect private consumption. The Reserve Bank of India has increased the interest rate by 250 basis points since May 2020 to control inflation. The World Bank also predicts that government spending will slowly pick up again as funds spent on Covid-19 outbreak and lockdown are withdrawn. The report estimates that the current account deficit of gross domestic product (GDP) will decrease to 2.1% in the current financial year. The World Bank also notes that developing markets like India will be impacted by factors such as the chaotic environment in the US and European markets, and highlights the strength of Indian banks.
Indian Economic Development
The World Bank has released a preliminary report on India’s economic growth. Accordingly, according to the research report published by the World Bank today, it has been reported that India’s economic growth will be 6.3 percent to 6.6 percent in the current financial year.
Inflation
Also, the World Bank says that customers will be affected by higher borrowing costs. It is also worth noting that the Reserve Bank of India has increased the interest rate by 250 basis points since May last year to control inflation.
Cost of credit
The World Bank has said that private consumption will be affected due to rising borrowing costs and weak economic growth. Government consumption is expected to start picking up again slowly as funds spent on the coronavirus outbreak and lockdown are now being withdrawn.
Low growth rate
The World Bank, which estimates that the country’s economic growth will be between 6.3 percent and 6.6 percent in this financial year, had predicted that India’s economic growth would be 6.9 percent in the last financial year. Similarly, the current account deficit of the gross domestic product (GDP) will decrease to 2.1 percent, according to the World Bank. Last year it was estimated at 3 percent.
Indian Banks
The GDP deficit narrowed as services exports rose and the trade deficit narrowed. According to Dhruv Sharma, Economist of the World Bank, ‘Developing markets like India will be affected by the chaotic environment in the US and European markets. At the same time there are well capitalized Indian banks.’ said.