business
Tuesday Dec 06 2022
By
Reuters

World Bank sees India's growth at 6.9% this year

By
Reuters

Labourers work at the construction site of a residential building on the outskirts of Kolkata, India, July 5, 2019. REUTERS/Rupak De Chowdhuri/Files
Labourers work at the construction site of a residential building on the outskirts of Kolkata, India, July 5, 2019. REUTERS/Rupak De Chowdhuri/Files
  • Global slowdown has much slower impact on indian economy, says World Bank
  • Indian economy expanded by 6.3% in July-September quarter: WB
  • Average retail inflation at 7.1% this year, World Bank report. 


NEW DELHI: India's economy is expected to grow 6.9% in the current fiscal year, the World Bank said on Tuesday, adding that it is well-positioned to tackle global headwinds.

Asia's fourth-largest economy expanded 6.3% in the July-September quarter, and gross domestic product growth for the full fiscal year is likely to be 6.8-7%, the government said last week.

The World Bank raised its forecast for India's growth to 6.9% for the current fiscal year from 6.5% earlier. The Bank trimmed its expectation for the next fiscal year to 6.6% from 7% earlier.

India, like its global peers, has been plagued by a rise in commodity prices and tightening monetary policy by central banks worldwide.

However, the World Bank is confident that the global slowdown has a much lower impact on India, compared to other emerging economies.

"We have no concerns about India's debt sustainability at this stage," World Bank economist Dhruv Sharma said, adding that public debt had declined.

The report sees average retail inflation at 7.1% this year and warns that the fall in commodity prices could dampen inflationary pressures.

India's annual retail inflation eased to a three-month low of 6.77% in October, but some economists believe it could take up to two years before the rate eased to 4% — the middle level of the Reserve Bank of India's target.

However, the Indian rupee is expected to open lower versus the dollar on Tuesday after better-than-expected U.S. data rekindled worries on how high the Federal Reserve will hike rates.

The rupee is projected to open at around 81.90 per U.S. dollar, weaker than the 81.79 closing in the previous session. The rupee has in the last two sessions declined despite a host of positive cues. The local unit on Monday fell by the most in over a month.

After Monday's disappointment, the question now is whether rupee will be able to at least defend the 82 level, a spot trader at a foreign bank said.

A near-term range of 81-82 for the rupee has been broad consensus, and price action during the day will decide if that range will be revised, the trader added.

Treasury yields and the dollar index rose on Monday and U.S. equities declined after data showed that U.S. services industry activity unexpectedly picked up in November. read more