The World Bank has raised its GDP growth forecast for India in the fiscal year 2024-25 (FY25) to 7%, up from its previous estimate of 6.6%. This revision highlights the World Bank’s confidence in India’s economic resilience, particularly in a global environment that remains challenging.
This upward adjustment is based on several factors, including strong public infrastructure investments, an upswing in household investments in real estate, and a robust performance in the manufacturing sector, which grew by 9.9% in FY24. Despite these positives, the World Bank also pointed out challenges such as high youth unemployment and the need for India to diversify its export basket to maintain sustainable growth.
Looking ahead, the World Bank expects India’s medium-term growth prospects to remain strong, with GDP growth projected at 6.7% for FY26 and FY27. Additionally, the World Bank anticipates a gradual decline in India’s debt-to-GDP ratio and expects inflation to stabilize around 4.5% in FY25, with further reductions in the following years.
India’s ability to navigate these challenges and leverage global value chains will be critical in sustaining its growth trajectory and achieving broader economic goals, such as increasing merchandise exports to $1 trillion by 2030.
This forecast reflects a broad consensus among major financial institutions, with the IMF and Moody’s also recently revising their growth projections for India upwards.
Comments 3