World Bank lowers India’s growth forecast to 6.3% (G.S)
- In its South Asia Economic Focus report titled “Expanding Opportunities: Toward Inclusive Growth”, released ahead of the Spring Meetings in Washington DC, the World Bank downgraded India’s economic growth forecast for the current fiscal year (FY) ending on March 31, 2024 by 0.7 percentage points to 6.3%. The report attributed this downgrade to high borrowing costs, slower income growth leading to weaker consumption, and the government’s tighter fiscal expenditure.
Situation for Sri Lanka and Pakistan
- World Bank forecast for Sri Lanka in the current year is a contraction of -4.3%.
- World Bank forecast for Pakistan for the year ending June 30, 2023 is a growth of only 0.4%.
- Political uncertainty in Pakistan makes it difficult to implement decisive reforms.
- Islamabad is negotiating the release of a $1.1 billion tranche of a larger $6.5 billion bailout package with the IMF.
- IMF is awaiting assurances from Pakistan that it can finance this year’s balance of payments deficit.
- Sri Lanka negotiated a $3 billion loan from the IMF in March.
- Sri Lanka is hoping to secure further financing from international institutions.
- The IMF program in Sri Lanka makes it easier for the World Bank to support the country.