The World Bank has adjusted its forecast for India's GDP growth rate for the fiscal year 2024-25.
The new estimate is 6.6%, an increase from the earlier 6.4% projected in January.
With this new upward revision, India maintains its status as the fastest-growing economy among the world's largest economies.
Based on the most recent Global Economic Prospects reports from the World Bank, India's growth projections have been adjusted due to significant public investment, private capital spending, and an increase in private consumption.
The report indicates that India's industrial sector, including manufacturing and construction, experienced more robust growth than anticipated.
Therefore, this substantial industrial expansion, coupled with resilient services, has mitigated a decline in agricultural output, partially due to the impact of monsoons.
The World Bank noted that domestic demand growth remained high.
A surge in investment, particularly in infrastructure, helped balance a moderation in consumption growth as post-pandemic pent-up demand eased.
For the financial year 2025-26, the World Bank has also raised India's growth projections from 6.5% to 6.7%.
"India's economy has been buoyed by strong domestic demand, with a surge in investment and robust services activity. It is projected to grow an average of 6.7 percent per fiscal year from 2024 through 2026--making South Asia the world's fastest-growing region," the World Bank report read.
Continued Strong Domestic Demand
GDP per capita in emerging markets and developing economies (EMDEs), including India, is forecast to grow at about 3% on average over 2024-26.
"Some large EMDEs, such as India, are expected to see continued solid per capita growth," it said.
Importing countries other than China have shown strong activity in the commodity market. This strength is evident in major economies such as India, where domestic demand has remained consistently strong.
According to official Indian government data, the country's GDP grew at a massive 8.2% during the financial year 2023-24, maintaining its status as the fastest-growing major economy. India’s economy grew 7.2% in 2022-23 and 8.7% in 2021-22, respectively.
Projections for India Economic Growth
The Reserve Bank of India, in its latest monetary policy meeting, raised the GDP projection for the financial year 2024-25 to 7.2% from the earlier estimate of 7%. Also,
Morgan Stanley predicts a growth rate of 6.8% for India in 2024. The International Monetary Fund (IMF), in its latest World Economic Outlook, raised its projections for 2024 from 6.5% to 6.8%.
Furthermore, the United Nations has increased its economic growth projections for India in 2024 from 6.2% to 6.9%, mainly because of public investment and resilient private consumption.
Moody's Ratings also expects India to grow at 6.6% in the current financial year 2024-25.
Moreover, the Asian Development Bank (ADB) upgraded India's gross domestic product (GDP) growth prediction for the financial year 2024 from 6.7% to 7%.
India's economic growth is forecasted by the World Bank to average 2.6% in 2024, up from 2.4% in January, and is anticipated to increase to 2.7% in the next two years.
"Four years after the upheavals caused by the pandemic, conflicts, inflation, and monetary tightening, it appears that global economic growth is steadying," said Indermit Gill, the World Bank Group's chief economist and senior vice president.