World Bank raises India’s GDP forecast to 7.5% for FY24 but flags job scarcity

Tribune News Service

Sandeep Dikshit

New Delhi, April 3

The World Bank has revised upwards India’s GDP growth for 2023-24 by a massive 1.2 points to 7.5 per cent but cautioned that the country and its neighbours Pakistan and Bangladesh could miss the opportunities created by the demographic dividend or a greater proportion of the young.

Economy to grow by 6.6% in FY25

• World Bank sees India’s growth slowing down to 6.6 per cent in 2024-25 due to lower investments than in the previous year.
• The lower investments will be partially offset by a decline in fiscal deficit and government debt.

The World Bank raised India’s GDP forecast on the back of robust activity in services and industry. Bangladesh’s GDP is expected to grow at 5.6 per cent and Pakistan’s by 1.8 per cent after suffering a contraction in 2022-23.

In its latest update for South Asia, the World Bank said the region’s employment ratio was falling. This means the three countries were not creating enough roles for their young population and thus stand the risk of squandering their demographic dividend. South Asia was “the only region where the share of working-age men who are employed fell over the past two decades,” noted the World Bank. The World Bank’s huge revision in Gross Domestic Product growth in India follows a stunning 8.4 per cent growth recorded in the October-December quarter. The January-March Gross Domestic Product growth figures are also likely to be in the 8 per cent range.

But it sees growth slowing down to 6.6 per cent in 2024-25 due to lower investments than in the previous year. The lower investments would be partially offset by a decline in fiscal deficit and government debt. Besides India, growth will be strong in the rest of South Asia which will have a combined growth rate of 6.1 per cent in 2024-25. Bangladesh’s Gross Domestic Product will grow by 5.7 per cent, Pakistan’s by 2.3 per cent and Sri Lanka’s by 2.5 per cent during this period.

India and its neighbours are not creating enough jobs to sustain their young population, the World Bank has warned, putting the region’s demographic dividend at risk even as it enjoys the world’s fastest economic growth.

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