The World Bank improves its estimate of India’s GDP for FY24 to 7.5% but notes a lack of jobs

The World Bank has increased India’s GDP growth estimate for 2023–2024 by a staggering 1.2 percentage points to 7.5%, but it has issued a warning that the nation, along with Bangladesh and Pakistan, may lose out on the opportunity presented by the demographic dividend or a higher share of the youthful population.

The World Bank upgraded its estimate for India’s GDP due to the country’s booming industrial and service sectors. Pakistan’s GDP is predicted to expand by 1.8% and Bangladesh’s by 5.6% after a decrease in 2022–2023.

The World Bank said in its most recent report for South Asia that the employment ratio in the area was declining. Accordingly, the three nations run the danger of losing their demographic dividend since they are not providing enough jobs for their youthful populations. According to the World Bank, South Asia was “the only region where the share of working-age men who are employed fell over the past two decades.” The enormous adjustment of India’s GDP growth by the World Bank comes after an astounding 8.4% rise in the October–December quarter. The GDP growth estimates for the months of January through March are likewise probably going to be in the 8 percent level.

However, it projects that growth would drop to 6.6% in 2024–2025 as a result of lesser investments than in the year before. A reduction in the government debt and the budget deficit would somewhat offset the fewer investments. The remainder of South Asia, excluding India, is expected to expand rapidly, with a total growth rate of 6.1% in 2024–2025. During this time, the gross domestic products of Bangladesh (5.7%), Pakistan (2.3%), and Sri Lanka (2.5%) would all increase.

Even though the area is seeing the fastest economic development in the world, the World Bank has cautioned that India and its neighbors are not producing enough employment to support their youthful population. This puts the region’s demographic dividend at danger.