World Bank updates its forecast for India’s growth in FY25 to 6.6%; fixes FY24 GDP at 7.5%

The Indian Statistics Department estimated the current year’s growth rate at 7.6 percent in its second advance estimate of GDP for 2023–2024—a 30 basis point increase over its previous estimate of 7.3 percent.

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On April 2, the World Bank increased its estimate of India’s GDP growth to 6.6 percent in FY25, a 20 basis point increase.

The global agency’s FY25 projection is much more conservative than the estimated 7.5% real GDP growth for the current fiscal year.

The Indian Statistics Department estimated the current year’s growth rate at 7.6 percent in its second advance estimate of GDP for 2023–2024—a 30 basis point increase over its previous estimate of 7.3 percent.

The anticipated decline in growth from 2023–2024 to 2024–2025 is primarily the result of investment slowing down from its high rate in the prior year. On the other hand, solid growth is anticipated in both industry and services, with the latter being supported by brisk real estate and construction activity.

It is anticipated that inflationary pressures will lessen, giving policymakers greater leeway to loosen financial regulations.

The World Bank stated in its South Asia Development Update for April 2024 that strong output growth and central government reduction initiatives will enable a medium-term decline in the fiscal deficit and public debt.

Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are all considered to be part of South Asia as defined in this research.

“In the rest of the region, while picking up, growth is expected to remain mostly well below pre-pandemic averages,” as per the April 2024 Update.

The growth forecast for South Asia is 0.3 percentage points higher for 2025 and 0.4 percentage points higher for 2024 than it was in the last edition of this study.

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