India’s Growth Trajectory: World Bank Upgrades GDP Forecast
The World Bank has upgraded India’s GDP growth forecast for 2024-25 to 6.6%, highlighting strong public investment and robust domestic demand as key drivers.
The World Bank has revised India’s GDP growth forecast for 2024-25 to 6.6%, citing strong public and private investments and resilient domestic demand. This upward revision aligns with positive projections from other global institutions, reinforcing India’s status as the fastest-growing major economy.
The World Bank has revised India’s GDP growth forecast for the financial year 2024-25, nudging it up by 20 basis points to 6.6 percent from the earlier projection of 6.4 percent made in January. This adjustment highlights India’s standing as the fastest-growing of the world’s largest economies, despite expectations of a more moderated pace of expansion.
Strong Investments Propel Growth
In its latest Global Economic Prospects report, the World Bank attributed the positive revision to robust public investment, increased private capital expenditure, and rising private consumption. Notably, the growth in industrial activities, particularly in manufacturing and construction, exceeded expectations. This industrial surge, combined with resilient services activity, has successfully counterbalanced the slowdown in agricultural production, partly due to unfavorable monsoon conditions.
Domestic demand has remained robust, with a significant surge in infrastructure investment offsetting a slight moderation in consumption growth. This moderation follows the easing of post-pandemic pent-up demand, suggesting a return to more stable consumption patterns. For the financial year 2025-26, the World Bank has similarly raised growth projections from 6.5 percent to 6.7 percent, indicating sustained economic momentum.
Continued Domestic Resilience
The World Bank report highlights that India’s economy benefits from strong domestic demand and robust services activity. The institution projects an average growth rate of 6.7 percent per fiscal year from 2024 through 2026, positioning South Asia as the fastest-growing region globally.
The report highlights that India’s economy is thriving due to strong domestic demand, a surge in investments, and robust services activity. It forecasts an average growth rate of 6.7 percent per year from 2024 to 2026, positioning South Asia as the fastest-growing region globally.
Despite the challenges, growth in domestic demand, particularly investment in infrastructure, remains robust. This surge has been critical in maintaining economic momentum as the initial burst of post-pandemic consumption growth begins to stabilize.
Record of Recent Growth
According to official data from the Indian government, the GDP grew by a substantial 8.2 percent during the financial year 2023-24, reinforcing India’s position as the fastest-growing major economy. This follows growth rates of 7.2 percent in 2022-23 and 8.7 percent in 2021-22, showcasing a consistent upward trajectory.
Reflecting this optimism, the Reserve Bank of India, in its latest monetary policy meeting, raised the GDP forecast for 2024-25 to 7.2 percent from the previous 7 percent. Similarly, Morgan Stanley forecasts a 6.8 percent growth rate for India in 2024. These projections align with the latest International Monetary Fund (IMF) World Economic Outlook, which also upgraded India’s growth expectations for 2024 from 6.5 percent to 6.8 percent.
Global Confidence in India’s Economic Prospects
The United Nations has recently raised India’s economic growth projections for 2024 from 6.2 percent to 6.9 percent, driven primarily by strong public investment and resilient private consumption. Likewise, Moody’s Ratings projects a 6.6 percent growth rate for India in the current financial year 2024-25. The Organisation for Economic Co-operation and Development (OECD) forecasts a consistent 6.6 percent growth rate for India over the next two years.
The Asian Development Bank (ADB) also upgraded India’s GDP growth forecast for the financial year 2024 from 6.7 percent to 7 percent. These upgrades from multiple global institutions underscore the broad confidence in India’s economic prospects.
India’s economic resilience is a testament to its robust domestic demand, strategic public investments, and a dynamic private sector. As the fastest-growing major economy, India continues to attract positive attention and projections from leading global financial institutions. Despite potential challenges, the country’s economic outlook remains strong, driven by sustained investments and consumption.
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