World Bank raises India’s FY25 growth forecast to 7% from 6.6% earlier

The World Bank raised India’s FY25 growth forecast to 7% from 6.6% earlier on Tuesday. The international financial institution said that the economy will grow at an average of 6.7% over FY26-FY27. 

According to the World Bank Report, India's growth continues to be strong despite a challenging global environment.

The growth rate of India, which accounts for the bulk of the South Asia region, is expected to remain strong at 7% in 2024–25, the World Bank said in the India Development Update.

Recovery in agriculture will partially offset a marginal moderation in industry, it said, adding that services will remain robust.

The entity further said that rural private consumption will recover, thanks to the expected recovery in agriculture.

Meanwhile, on Thursday, August 29, Moody's raised India's GDP growth forecast for 2024 and 2025 calendar years to 7.2% and 6.6%, respectively, on strong broad-based growth.

India's gross domestic product (GDP) growth moderated to 6.7% year-on-year in the first quarter or April-June period of financial year 2024-25, as per the data released by the government on Friday, August 30. This marked the slowest rate of growth in the last five quarters.

In the preceding March 2024 quarter, the Indian economy had grown by 7.8%, whereas it had accelerated by 8.2% in the April-June period of fiscal year 2023-24.

"Real GDP, or GDP at constant prices, in Q1 of 2024-25 is estimated at ₹43.64 lakh crore against ₹40.91 lakh crore in Q1 of 2023-24, showing a growth rate of 6.7%," the National Statistical Office (NSO) said in a statement.

The slump in GDP in the first quarter was mainly due to poor showing by the farm sector, according to the government data.

The agriculture sector recorded 2% growth, down from 3.7% in the April-June quarter of 2023-24, as per the numbers released by NSO.

However, the growth in the manufacturing sector accelerated to 7% in the first quarter of the current fiscal compared to 5% in the year-ago period.

Recently, Prime Minister Narendra Modi said that India is writing a unique success story, adding that the impact of the reforms is visible in the economic performance. 

"The global economy has grown by 35% in the last 10 years, and our economy has grown by almost 90% in the last 10 years. This is sustainable growth that we have achieved. This sustainable growth will continue in the future as well. Reform, perform, and transform has been our mantra. People are seeing the achievements of the country and are full of confidence," the PM said while addressing the ET World Leaders Forum.