World Bank projects weak global economy, India, US in bright spots

Anjali Sharma

GG News Bureau

WASHINGTON DC, 12th Oct. – Indermit Gill, World Bank chief economist on Wednesday projected a weaker global economy, but India, US in bright spots

He said “But the good news basically ends there.”

The global economy is getting weaker, but the US and India are bright spots in an arena where high interest rates are dragging growth lower, Indermit Gill said on Wednesday.

“The World Bank is getting stronger and the world economy is getting weaker. The good news is that there are a few bright spots, like the US and India. The other good news is that in spite of all of these shocks, we have not seen any big economy really get into trouble. But the good news basically ends there,” Gill said.

Gill added “The trouble now is that because of the high interest rates, growth is slowing down a lot. The big problem is that growth is slowing down to levels that are much lower than what we had seen before the crisis,”.

Gill with Ajay Banga, World Bank president, addressed the media in Marrakesh ahead of the start of the annual meeting of the World Bank Group and the IMF.

He warned that the possible impact of high interest rates could best be understood by looking at what happened in the 1970s when the US Federal Reserve raised rates.

Gill said “There are two or three things to think about. The first one is that it took a long time it didn’t take one or two years. So we should expect this tightening cycle to also take long. The second one is at that time, it left about 24 economies bankrupt,”.

“And we should expect some countries to get into trouble now,” he warned.

World Bank projected India’s GDP to grow at 6.3% in FY24, at 6.4% in FY25 and 6.5 in FY26, it

S worth noted

It foresees fiscal consolidation continuing into FY24, with the central government’s fiscal deficit expected to decline from 6.4% to 5.9% of the GDP.

World Bank elaborated that “Public debt is projected to stabilize at 83% of the GDP. On the external front, the current account deficit is likely to narrow to 1.4% of the GDP and will be adequately financed by flows of foreign investment, bolstered by large foreign reserves.”

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