The World Bank’s latest Global Economic Prospects report highlights economic trends and investment challenges in Emerging Markets and Developing Economies (EMDEs), including India.
About the Report:
- The World Bank’s Global Economic Prospects report focuses on investment trends and economic forecasts in EMDEs.
- The report analyzes public investments, its benefits, and recommendations for increasing investment effectiveness.
Key Highlights of the Report:
- Public investment in EMDEs averages around 25% of total investment.
- There has been a historic slowdown in public investment in these economies over the past decade.
- In India specifically, economic growth is estimated to have risen to 8.2% in FY 2023/24, a 1.9 percentage point increase from earlier estimates.
- Global growth is projected to remain steady at 2.6% in 2024, slightly increasing to an average of 2.7% in 2025-26, which is below the 3.1% average pre-COVID-19.
- Economic growth: A 1% increase in public investment could potentially boost GDP by over 1.5%, and raise private investment by 2.2% in the medium term.
- However, increased public investment might crowd out private investment if fiscal space is limited, raising sovereign risk and borrowing costs.
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