Indian economy growing at healthy pace despite challenging global conditions: World Bank

India’s economy is growing at a healthy pace despite challenging global conditions, the World Bank said on Tuesday.

The international financial institution’s latest India Development Update said that the country’s economy grew by 8.2% in the financial year 2023-’24, retaining its position as the world’s fastest-growing major economy.

This growth was boosted by investments in public infrastructure and an uptick in household investments in real estate, according to the World Bank.

India’s underperformance in the agriculture sector was compensated by growth in manufacturing, which swelled by 9.9%, and the service industry that remained resilient, it said.

The World Bank said that despite challenging external conditions, it expects India’s economic outlook in the medium term to remain positive, with a growth of around 7% in 2024-’25 that will “remain strong” over the next two financial years.

The institution noted that the rate of urban unemployment had reduced gradually since the Covid-19 pandemic, especially for female workers. The unemployment rate among urban women had fallen to 8.5% in the early part of the financial year 2024-’25. It was 9.2% during the same period in the previous financial year.

However, the unemployment rate among urban youth remained high at 17%, the World Bank said.

The India Development Update also emphasised that the country must boost its competitiveness through the National Logistics Policy and digital initiatives that could reduce trade costs.

The National Logistics Policy aims to increase economic growth by reducing logistics costs.

The bank also said that to reach its target of $1 trillion in merchandise exports by 2030, India needs to diversify its exports, reduce trade costs, remove barriers to trade and leverage global value chains.

Merchandise exports refers to goods that are manufactured in one country and sold in another.