The World Bank on Tuesday retained its growth forecast for India at 6.6 per cent for FY25.
“India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate. After a high growth rate in FY 2023/24, steady growth of 6.7 per cent per year, on average, is projected for the three financial years beginning in FY 2024/25,” the multilateral bank said in its latest biannual Global Economic Prospects.
For FY26 and FY27, the World Bank projected India’s economy to grow at 6.7 per cent and 6.8 per cent respectively. In FY24, the National Statistical Office has estimated gross domestic product (GDP) to have grown at 8.2 per cent.
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The Reserve Bank of India in its latest monetary policy review last week raised its growth projection to 7.2 per cent for FY25 from 7 per cent estimated earlier. “The forecast of above normal south-west monsoon by the
India Meteorological Department (IMD) is expected to boost kharif production and replenish the reservoir levels. Strengthening agricultural sector activity is expected to boost rural consumption. On the other hand, sustained buoyancy in services activity should continue to support urban consumption. The healthy balance sheets of banks and corporates; the government’s continued thrust on capex; high capacity utilisation, and business optimism augur well for investment activity. External demand should get a fillip from improving prospects of global trade,” RBI governor Shaktikanta Das said in his statement.
The World Bank said in India, the fiscal deficit is projected to shrink relative to GDP, partly because of increased revenues generated by the authorities’ efforts to broaden the tax base. “India’s economy has been buoyed by strong domestic demand, with a surge in investment, and robust services activity. Some large emerging market and developing economies (EMDEs), such as India, are expected to see continued solid per capita growth,” it added.
FY25 forecasts (%)
Source: BS Research
First Published: Jun 11 2024 | 8:11 PM IST