India’s growth rate is anticipated to drop, but it is still expected to be the fastest-growing major economy in the world, according to World Bank predictions. The June edition of “Global Economic Prospects” kept India’s GDP growth prediction for FY25 at 6.6%. The primary cause of this moderation is the decline in investment from a high base. Nonetheless, investment growth is anticipated to continue to be robust throughout the projected period, with strong public investment being matched by private investment. This is in contrast to earlier projections.
The international organization raised its estimate of India’s GDP growth for the current fiscal year by 20 basis points, to 6.6%.
In its Global Economic Prospects for June 2024, the World Bank predicted that following a strong performance in FY24, the economy would grow at an average annual rate of 6.7% (or 6.7% in FY26 and 6.8% in FY27) during the three fiscal years beginning in FY25.
India’s GDP growth beat forecasts in the January–March quarter, coming in at 7.8%, however, that was down from 8.4% in the third quarter. The updated GDP growth projection for the entire fiscal year 2023–2024 is 8.2 percent, up from the second advance estimate of 7.6 percent.
In a recent announcement of its Monetary Policy, the Reserve Bank in India revised up its earlier prediction of 7% GDP growth to 7.2% for FY25.
Global GDP growth for 2024–2025 is now predicted to be 2.6%, up 20 basis points from the forecast made in January. Global growth is predicted to be 2.7% in FY26 and FY27 on the back of moderate increases in trade and investment.
The World Bank research stated that India, the country with the biggest economy in South Asia, has made a substantial contribution to the expansion of the area, especially in the manufacturing and services sectors. The predicted 8.2% growth rate for the nation in FY24 represents a significant increase of 1.9 percentage points from previous forecasts.
India’s industrial and services sectors have propelled the country’s economic expansion, counterbalancing a decline in agricultural output brought on by monsoon disruptions. Even as post-pandemic pent-up consumption demand eases, infrastructure investments support a robust domestic demand. Since September 2023, India’s inflation rate has been between 2 and 6%, which has helped to maintain a stable economic climate.
The World Bank stated that steady growth in India is anticipated to maintain the region’s growth rate at 6.2% in 2025–2026. While the economies of Pakistan and Sri Lanka are predicted to continue growing well, other economies in the region, like Bangladesh, are predicted to continue growing robustly, albeit more slowly.
The global outlook remained muted by historical standards, despite better near-term expectations. Downside risks included trade fragmentation, higher-for-longer interest rates, geopolitical tensions, and climate-related disasters. According to World Bank research, international collaboration is necessary to protect commerce, facilitate digital and green transitions, reduce debt, and enhance food security.