Marrakech (Morocco): Domestic consumption and investment demand will continue to drive growth though global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, finance minister Nirmala Sitharaman said Thursday.
The finance minister also added that the situation warrants greater vigilance by the government and Reserve Bank.
Calling for timely consensus on the transformation of the World Bank for accelerating progress towards the achievement of the 2030 Sustainable Development Goals (SDGs), Sitharaman during her in her address at the meeting of the World Bank’s Development Committee, said, “The government has already taken pre-emptive measures to restrain food inflation which is likely to subside price pressure in the market soon.”
The body is a joint ministerial committee of the boards of governors of the World Bank and the International Monetary Fund on the transfer of real resources to developing countries.
She said the external sector required a closer watch, observing that the global economic landscape was still marked by unprecedented challenges to economic growth and stability.
Sitharaman said India’s growth prospects remain strong, and domestic economic activity is maintaining resilience with a healthy balance sheet of the private sector and increased capex spending of the government, crowding in private investment.
On Tuesday, the IMF raised India’s real GDP growth forecast for FY24 to 6.3% from 6.1%.
Forecasts by other international organisations are higher, Sitharaman said, adding the robustness of domestic investment is the result of the government’s continued emphasis on capital expenditure, which is expected to drive growth in the coming years.
Given the importance of private investment in accelerating economic growth, she said, the government has been making various attempts to raise investment by the private sector.
World Bank Transformation
The FM emphasised the need for enabling private capital mobilisation at scale will require an enhanced ‘One World Bank’ approach. “At the same time, we must be realistic in our assessment of the potential of private capital mobilisation, given the global economic outlook,” she said.
The recent reports of the G20 Independent Expert Group on Strengthening MDBs, give an indication of resource requirement and we urge consideration of its recommendations on priority, she said.
