FITCH Ratings has revised down India’s GDP growth forecast for 2023-24 to 6 percent from 6.2 percent, due to factors such as inflation and interest rates. This comes after the World Bank also lowered its growth forecast for India to 6.3 percent and called for a more inclusive labor market. The world has been severely impacted by the ongoing war in Ukraine and India has also been affected – albeit, not to the extent other countries have been. In the neighbourhood, Pakistan’s economy has been the hardest hit, bringing the country to the brink of economic ruin. But India is pulling along well and remains one of the world’s fastest-growing economies.
Despite the Fitch Ratings downgrade, India is expected to be a stable economy, thanks to its resilient investment prospects. The private sector seems poised for stronger investment growth.
One of India’s biggest advantages is that its large domestic market makes it an attractive destination for foreign capital. The country has also been bidding for capital looking for new destinations following the disruption in global supply chains triggered by the Ukraine war. And India is likely to become a go-to place for major global corporations. Recently, Apple set up shop in the country. It has launched its first retail store in India, located in Mumbai, and will open another store in Delhi shortly. Until now, Apple products have only been available in India through a vast network of resellers or online. The move comes as Apple tries to deepen its retail push in India, which is the world’s second-largest smartphone market.
This is a big development at a time when global supply chain disruption triggered by the Ukraine war and the west’s developing antagonism towards China is forcing countries to shift their bases toward more stable markets. To top it all, India also offers a lucrative market as it boasts a burgeoning middle class that has money to spend.
So, India’s growth prospects have brightened, although this year’s growth is expected to be slower than the 7 percent expected in 2022-23. Nonetheless, the country’s economy is expected to rebound to 6.7 percent in 2024-25, indicating a steady recovery in the long run.
Recently, India has also overtaken China as the world’s most populous nation, according to United Nations data. The country’s demographic profile, therefore, presents a competitive advantage in terms of workforce, with a relatively young population. But this young population needs jobs which only a growing economy can provide. So, the government needs to ensure that while the economy grows, it shouldn’t be a jobless growth.
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