Publication: India Development Update, October 2023
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2024-07-24
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2024-07-24
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Global economic growth is set to slow in 2023, compared with the previous year. Continued high inflation and the effects of monetary policy tightening added pressures to economic growth over the short term, particularly in the Europe. The fading rebound of economic activities from the pandemic, combined with fragilities in the real estate sectors, has eroded growth in China. While the growth outturn in the US over the first half of 2023 has been stronger than expected, demand is weakening amid exhausting excess savings accumulated during the pandemic; tightening credit conditions; and the banking sector turmoil earlier this year. Nevertheless, in contrast to softening global manufacturing activities, service sectors experienced solid growth in the past year, as measured by Purchasing Managers’ Indices (PMI). As a result, India, as a large service exporter, showed relative resilience against the challenging external conditions: India remained one of the fastest growing major economies in the world; in FY22/23, its GDP expanded by 7.2 percent, with robust growth in domestic demand bolstered by strong investment activity and solid private consumption. Net exports especially goods exports, however, were a drag on growth amid weakening global demand weighing on India’s merchandise exports and resilient domestic demand pushing up imports.
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“World Bank. 2024. India Development Update, October 2023. © World Bank. http://hdl.handle.net/10986/41948 License: CC BY-NC 3.0 IGO.”
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