World Bank revises growth forecast for India, to 7%

Earlier, it was 6.6%

This is a robust growth trajectory

The World Bank has revised its growth forecast for India, raising it to 7% for FY24/25 from the earlier estimate of 6.6%. This upgrade, highlighted in a recently released India-focused report, underscores the country’s strong economic prospects, bolstered by declining inflation and a robust growth trajectory that is expected to contribute significantly to reducing extreme poverty.

Also Read: World Bank projects India’s economy to grow at 7.5% in 2024

According to the report, India emerged as the fastest-growing global economy in FY23/24, achieving an impressive growth rate of 8.2%. This surge was attributed to an improved labor market and continued strength in service trade. Key factors driving this growth included public infrastructure investments and a notable rise in household real estate investments. On the supply side, the manufacturing sector showed strong performance, growing by 9.9%, while resilient service activities helped offset weaker performance in the agriculture sector.

The report also noted positive trends in urban employment, particularly with a rise in female participation, which led to a drop in female urban unemployment to 8.5% in early FY25. However, urban youth unemployment remains a concern at 17%.

Looking ahead, the World Bank projects a steady decline in India’s debt-to-GDP ratio, from 83.9% in FY24 to 82% by FY27, supported by robust revenue growth and fiscal consolidation. The current account deficit is expected to stabilize around 1.6% of GDP through FY27. The medium-term outlook remains positive, with growth forecasts of 6.7% for FY26 and 6.8% for FY27, reflecting India’s resilience amid global economic challenges.