World Bank Increases India's GDP Growth Forecast for 2024-25

The World Bank has delivered positive news for India, revising its GDP growth forecast for the current financial year (2024-25) upwards by 20 basis points to 6.6%. This upward revision solidifies India's position as the fastest-growing major economy in the world, despite an expected moderation in its pace of expansion.

Factors Behind India's Robust Growth

The World Bank attributes India's economic strength to several key factors:

• Strong Public Investment: Government spending on infrastructure and other development projects has provided a significant boost to the economy.

• Private Capex and Consumption: Increased investments from private businesses and a rise in private consumption have further fueled growth.

• Resilient Services Activity: The services sector, a crucial pillar of the Indian economy, has remained robust, demonstrating its adaptability.

Industrial Strength Counters Agricultural Slowdown

While monsoon patterns led to a slowdown in agricultural production, India's industrial activity, encompassing manufacturing and construction, exceeded expectations. This robust industrial performance helped offset the agricultural challenges.

Looking Ahead: Continued Growth Expected

The World Bank's optimism extends beyond the current year. Their forecast projects India's GDP to grow at an average of 6.7% per year from 2024 to 2026. This sustained growth trajectory positions South Asia as the world's fastest-growing region.

India's Growth Story Gains Momentum

India's economic performance has garnered significant attention from leading financial institutions. Here's a glimpse into their projections:

• Reserve Bank of India (RBI): Raised India's GDP forecast for 2024-25 to 7.2%.

• Morgan Stanley: Forecasts 6.8% growth for India in 2024.

• International Monetary Fund (IMF): Revised India's growth projections for 2024 to 6.8%.

• United Nations: Upgraded India's growth projections for 2024 to 6.9%.

• Moody's Ratings: Expects India to grow at 6.6% in 2024-25.

• Organisation for Economic Co-operation and Development (OECD): Projects India to grow 6.6% over the next two years.

• Asian Development Bank (ADB): Upgraded India's GDP growth forecast for 2024 to 7%.

Conclusion

India's economic growth remains robust, driven by strong domestic demand, public and private investment, and resilient industrial and services sectors. With multiple international and national institutions revising their growth projections upward, India is set to retain its position as the fastest-growing major economy in the world.