India to remain fastest growing large economy in 2024, World Bank reports

India, despite a projected slowdown this year, will continue to be the world’s fastest-growing large economy, according to the World Bank’s latest Global Economic Prospects report.

The world’s most populous nation is forecast to expand by 6.6% this year, down from 8.2% in 2023, driven by strong domestic demand and a surge in investment. India’s growth is propelling South Asia to be the fastest-growing region, the World Bank said in the report published Tuesday.

Global economic growth will hold steady at 2.6% in 2024 after three straight years of decline, in what appears to be a “final approach for a ‘soft landing.'” However, overall risks facing the world’s economy are tilted toward the negative.

The East Asia and Pacific region—which includes China, South Korea, ASEAN nations, and Pacific island nations—is expected to slow to 4% this year from 4.2%. China’s growth rate is projected to drop to 4.8% from 5.2%.

China’s ongoing property sector slump, weak retail sales, and poor business sentiment are hurting investment, as policy uncertainty both domestically and internationally scares off investors. A worse-than-expected downturn in China could spill over into global commodity price volatility should Chinese demand for energy and other commodities weaken. Economies with strong trade ties to China could be especially vulnerable.

Indonesia and Vietnam will be bright spots among major economies in the region, with growth projections at 5% and 5.5%, respectively.

Among advanced economies, Japan’s sluggish consumption growth, slowing exports, and a stabilizing tourism sector are set to cause its economy to grow at 0.7% in 2024 compared to 1.9% last year. Though stable, the projected growth remains well below levels in the decade before the pandemic and is deemed “insufficient” for reaching key worldwide development goals, the World Bank said.

In the U.S., November’s presidential election has the potential to escalate geopolitical tensions, fragment trade, and hamper Asia-Pacific economies. The global lender noted that the protectionist trade policies of former U.S. President Donald Trump could be an issue should he win the race.