World Bank: The World Bank decreased its prediction for India’s economic growth in the current fiscal year, which began on April 1, from 6.6% to 6.3% on Tuesday because it anticipates that rising borrowing costs will have a negative impact on consumption. Since May, India’s central bank has increased interest rates by 250 basis points in an effort to control inflation. The World Bank stated in a research that “rising borrowing costs and weaker income growth will weigh on private consumption growth.”
Growth for the previous fiscal year was pegged at 6.9%
“Due to the removal of pandemic-related fiscal assistance measures, government consumption is predicted to expand at a slower pace.” Growth for the previous fiscal year was pegged at 6.9% by the World Bank. On the strength of strong service exports and a declining merchandise trade deficit, it predicted that the current account deficit would decrease from an expected 3% of gross domestic product in the previous fiscal year to 2.1% of GDP for the current fiscal year.
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Indian banks are nonetheless adequately capitalised
Short-term investment flows to developing markets, including India, are at danger due to spillover from recent financial market instability in the US and Europe, according to World Bank economist Dhruv Sharma. But Indian banks are nonetheless adequately capitalised, according to Sharma.
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