Editor's Pick: World Bank raises India’s growth projection to 6.9%

The World Bank on Tuesday changed its growth forecast for India’s economy this year to 6.9% citing resilience in economic activity despite a deteriorating external environment. The organisation had earlier downgraded it to 6.5% in October. World Bank’s country director in India, Auguste Tano Kouame, said that India’s strong macroeconomic fundamentals have placed it in good stead compared to other emerging market economies. The bank revised India’s GDP forecast after a strong upturn in July-September quarter when it grew 6.3% despite inflationary pressures and tighter financing conditions, “driven by strong private consumption and investment”. The report also added that one percentage point decline in growth in the United States is associated with a 0.4 percentage point decline in India’s growth. The same effect, however, is around 1.5 times larger for other emerging economies, placing India in a relatively better position. Challenges to Indian economy include a widening goods trade deficit that has expanded India’s current account deficit to 2.8% of GDP in Q2 this year from 1.5% in the first quarter. This has been driven by rising imports and softening exports. According to World Bank, India scores better than only the Philippines and Thailand on this macroeconomic stability metric. Although India’s forex reserves suffered a dip of over 10% this year, they are still over $500 billion and provide “adequate buffer against global spillovers” with an import cover of at least eight months, the Bank added. “While there are still some challenges in the financial sector, the adoption of several regulatory and policy measures—including introduction of a new Insolvency and Bankruptcy Code and creation of the new National Reconstruction Company Limited—facilitated an improvement in financial sector metrics over the past five years,” the Bank said. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. Click here. The Hindu’s Editorials Intense engagement: On India-Germany ties Kharge on the move: On Congress’s new CWC The Hindu’s Daily News Quiz Gilbert F. Houngbo is the Director-General of which international organization? ILO UNO WHO WTO To know the answer and to play the full quiz, click here. [logo] Editor's Pick 07 DECEMBER 2022 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( Dear reader, We have now made it easier for you to manage your The Hindu newsletter subscriptions in one place! 1. Visit [The Hindu newsletters page]( 2. Click MANAGE tab and then click LOGIN / SIGN UP 3. If you don’t have an account with The Hindu, please click SIGN UP OR If you already have an account with The Hindu with this email ID, please login using the email ID World Bank raises India’s growth projection to 6.9% The World Bank on Tuesday changed its [growth forecast]( for India’s economy this year to 6.9% citing resilience in economic activity despite a deteriorating external environment. The organisation had earlier downgraded it to 6.5% in October. World Bank’s country director in India, Auguste Tano Kouame, said that India’s strong macroeconomic fundamentals have placed it in good stead compared to other emerging market economies. The bank revised India’s GDP forecast after a strong upturn in July-September quarter when it grew 6.3% despite inflationary pressures and tighter financing conditions, “driven by strong private consumption and investment”. The report also added that one percentage point decline in growth in the United States is associated with a 0.4 percentage point decline in India’s growth. The same effect, however, is around 1.5 times larger for other emerging economies, placing India in a relatively better position. Challenges to Indian economy include a widening goods trade deficit that has expanded India’s current account deficit to 2.8% of GDP in Q2 this year from 1.5% in the first quarter. This has been driven by rising imports and softening exports. According to World Bank, India scores better than only the Philippines and Thailand on this macroeconomic stability metric. Although India’s forex reserves suffered a dip of over 10% this year, they are still over $500 billion and provide “adequate buffer against global spillovers” with an import cover of at least eight months, the Bank added. “While there are still some challenges in the financial sector, the adoption of several regulatory and policy measures—including introduction of a new Insolvency and Bankruptcy Code and creation of the new National Reconstruction Company Limited—facilitated an improvement in financial sector metrics over the past five years,” the Bank said. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor‘s Pick and more. [Click here.]( The Hindu’s Editorials [Arrow][Intense engagement: On India-Germany ties]( [Arrow][Kharge on the move: On Congress’s new CWC]( The Hindu’s Daily News Quiz Gilbert F. Houngbo is the Director-General of which international organization? - ILO - UNO - WHO - WTO To know the answer and to play the full quiz, [click]( [here](. 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