NEW DELHI: India is well placed to weather the current global energy shocks as risks are “cushioned by ample buffers” including high forex reserves, fiscal space and a well-capitalised banking system, World Bank said Thursday, while projecting average growth of 7.1% during FY28-FY29. The assessment comes a day after the multilateral lender raised its FY27 growth forecast for the country to 6.6% from 6.3%. “This is testimony to the fact that buffers that India had at the time of crisis were very strong and the authorities have struck a right balance between taking measures to manage supply without doing massive rationing. Risks are obviously massive (but) they are tilted to the downside,” said Aurelien Kruse, World Bank’s lead economist for India. The agency was also optimistic about recent trade agreements with the EU and the UK, arguing that they can provide a sustained boost to exports, reduce prices, and support household incomes across income groups. “These trade agreements are expected to significantly expand market access, potentially increasing the share of global GDP accessible through preferential trade from below 20% to nearly 38%,” said South Asia chief economist Franziska Ohnsorge. Commenting on the industrial policy of South Asia, the World Bank said that countries have been using them for the past decade to create more and better jobs, especially in the manufacturing sector, however, the track record has been mixed. “Inward restricting policies have restricted imports significantly over several years, but export promoting policies have not significantly promoted exports,” said Ohnsorge. At an event organised by NCAER, she said that it’s becoming “harder” for the countries in the region to create more and better jobs, while pointing out that around 28 crore young people will join the workforce in the next 10-15 years. Ohnsorge suggested that countries should removing obstacles in the adoption of AI so that businesses can make productive use of it and create more jobs.
