World Bank Revises Indian GDP Growth Forecast

World Bank revises Indian GDP growth forecast for FY25 to 7% from 6.6%

The World Bank has revised the growth forecast for India for FY25. It has been increased from the previous estimate of 6.6% to 7%.

According to the projections, the debt-to-GDP ratio may fall from 83.9% in FY 2024 to 82% by FY 2027. Moreover, the current account deficit is expected to remain between 1% and 1.6% of GDP throughout FY 2027.

According to government data, in the first quarter of FY 2024-25, the Indian economy expanded by 6.7%. This deceleration was linked to a decrease in government spending during the election period.

India as Fastest Growing Major Economy in the World: World Bank

"Amid geopolitical uncertainties and relatively restrictive monetary policy, the global economic activity experienced a deceleration in 2023 to 2.6%. India showed extraordinary resilience against challenging external conditions and grew at 8.2% in FY24, as the fastest growing major economy in the world," the World Bank stated in its India Development Update.

“Growth was boosted by public infrastructure investment and an upswing in household investments in real estate. On the supply side, it was supported by a buoyant manufacturing sector, which grew by 9.9 percent, and resilient services activity, which compensated for underperformance in agriculture,” the World Bank report said.

GDP Estimated by RBI for FY25

According to The Reserve Bank of India, the gross domestic product of India is estimated to rise by 7.2% for FY25. 

After the release of the India Development Update, Auguste Tano Kouame, the World Bank's Country Director for India said, “India has had success despite adversity. I don’t see the growth slowing down to the point it is trapped.”

Also, Moody has revised the growth forecast for India to 7.2% for 2024 from the previous estimate of 6.8% while 6.6% for 2025 from 6.4%.

The World Bank had also forecast the retail inflation of India, as per the Consumer Price Index, at 4.5% for FY25, 4.1% for FY26, and 4% for FY27.