India’s GDP is expected to slide down to 6.3 percent in 2023-24 as against its earlier estimate of 6.6 percent, mainly due to consumption falling owing to higher borrowing costs, according to a World Bank report released on Tuesday.
Since May last year, the Reserve Bank of India has been hiking interest rates to control inflation.
In its “India Development Update”, the World Bank said that economic growth is likely to be impacted due to sluggish consumption growth, coupled with challenging external factors.
“Rising borrowing costs and slower income growth will weigh on private consumption growth and government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures,” it said.
According to the report, India’s current account deficit is also likely to come down to 2.1 percent in 2023-24, as against 3 percent in 2022-23.
On inflation, the World Bank report said that it is likely to ease to 5.2 percent in the current fiscal as against 6.6 percent in the previous fiscal.