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World Bank Revises India's GDP Growth to 6.6% for FY25, Cites Robust Sector Growth

The World Bank's updated forecast anticipates a 6.6% GDP growth for India in FY25, driven by strong sectoral performance and an optimistic fiscal outlook.

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Dil Bar Irshad
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World Bank Revises India's GDP Growth to 6.6% for FY25, Cites Robust Sector Growth

World Bank Revises India's GDP Growth to 6.6% for FY25, Cites Robust Sector Growth

The World Bank has adjusted its economic outlook for India, foreseeing a brighter future with a 6.6% GDP growth in the fiscal year 2024-25. This uptick from previous estimates underscores the nation's resilient sectors amidst a global context of moderate growth.

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Economic Forecast Adjustment

On April 2, the World Bank announced a positive revision in India's GDP growth projection, increasing it by 20 basis points to 6.6% for FY25. This adjustment reflects a nuanced understanding of India's economic dynamics, especially considering a slight deceleration in investment growth from the previous year's vigorous pace. Despite this, sectors such as services and industry are anticipated to maintain robust growth, benefiting from strong construction and real estate activities.

Inflation and Fiscal Health

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The projection also brings good news on the inflation front, with pressures expected to ease, thereby potentially allowing for more accommodative financial conditions. Over the medium term, the World Bank anticipates a healthy fiscal scenario for India, with the fiscal deficit and government debt projected to decline. This optimistic outlook is supported by strong output growth and persistent consolidation efforts by the central government.

Regional Outlook and Implications

Looking beyond India, the South Asian region's growth prospects appear promising, with a projected expansion rate of 6.0–6.1 percent in 2024–25. This growth is notably stronger compared to other emerging markets and developing economies. The report attributes this regional optimism largely to India's economic performance, alongside expected recoveries in countries like Pakistan and Sri Lanka. The World Bank's revised forecast for India not only highlights the country's economic resilience but also underscores its pivotal role in driving South Asia's growth trajectory.

As India navigates this period of economic growth, the interplay between investment slowdown and sectoral robustness will be crucial. The World Bank's updated projections offer a beacon of hope, suggesting that strategic public investments and prudent fiscal management may pave the way for sustained economic development, both for India and the South Asian region at large.

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