World Bank raises India’s growth forecast to 7% in FY25

The World Bank has revised its growth forecast for India, raising the prediction for the 2024-2025 fiscal year from 6.6% to 7%. The announcement was made in a study titled “India Development Update: India's Trade Opportunities in a Changing Global Context,” released on Tuesday.

This report highlighted many positive aspects of the Indian economy. There were many factors that had a positive impact on the economy, thereby increasing the growth forecast for India.

Check out the report’s key findings below.

World Bank Report: Key Features

Check out the key points from the World Bank’s India Development Update Report:

• Strong growth: India remained the fastest growing major economy with an impressive growth rate of 8.2% in FY23-24. The reason for this growth is significant public infrastructure projects and increasing household investment in real estate.
• Production boost: The manufacturing sector experienced significant expansion, growing by 9.9%, contributing to economic growth.
• Resilient service sector: The services sector strengthened the Indian economy despite weaker development in agriculture.
• Positive outlook: The World Bank expects India to maintain economic growth and stability in the coming years.
• Debt reduction: India's debt-to-GDP ratio is expected to decline from 83.9% in FY23-24 to 82% in FY26-27. This decline will be supported by strong revenue growth and fiscal discipline.
• Stable current account deficit: The current account deficit is expected to remain stable between 1-1.6% of GDP until FY26/27.

Employment status in India

The India Development Update (IDU) also found that urban unemployment has been steadily improving as more women enter the workforce. At the beginning of FY 2024-25, urban female unemployment fell to 8.5%, while urban youth unemployment remained high at 17%.

India's growing foreign exchange reserves were also mentioned in the World Bank report. According to the report, reserves reached a record high of $670.1 billion in early August. This was due to a narrowing current account deficit and strong inflows from foreign portfolio investment. According to the report, these reserves are sufficient to cover the country's imports for over 11 months.