World Bank Projects India’s Economic Growth at 6.7% for Next 2 Fiscal Year

India’s economic growth is projected to remain steady at 6.7% annually for the next 2 fiscal years, beginning April 2025, according to a World Bank report on South Asia’s growth outlook. The report indicates that growth in South Asia, excluding India, is expected to rise to 6.2% in 2025-26.

2024-25 Economic Growth to Moderate

For the fiscal year 2024-25, India’s economic growth is expected to soften slightly to 6.5%, driven by a slowdown in investment and weak manufacturing growth. However, the World Bank highlights that private consumption remains resilient, primarily driven by improved rural incomes and a recovery in agricultural output.

This projection aligns with other estimates from analysts and institutions. The latest FICCI Economic Outlook Survey projects India’s GDP growth for 2024-25 at 6.4%, a dip from 7.0% predicted earlier in September 2024.

The Ministry of Statistics and Programme Implementation has also estimated a 6.4% growth rate, while BofA Securities India forecasts 6.5%. Acuité Ratings & Research and CareEdge Ratings predict a growth range of 6.4% to 6.5%, while Nomura expects a growth of 6.7%. The Reserve Bank of India has lowered its growth forecast for FY25 to 6.6%.

Services and Manufacturing Sectors to Lead Growth

The World Bank forecasts that India’s services sector will experience sustained expansion, while the manufacturing sector will see a strengthening, bolstered by government initiatives aimed at improving the business environment. Investment growth is expected to remain steady, with moderating public investment being offset by a rise in private-sector investment.

Strong GDP Growth in Recent Years

India’s economy has grown at a steady pace in recent years, with GDP growth recorded at 9.7% in FY22, 7% in FY23, and 8.2% in FY24.

South Asia Growth Outlook

For the rest of South Asia, the World Bank forecasts a growth rate of 3.9% in 2024, buoyed by recoveries in Pakistan and Sri Lanka and improved macroeconomic policies.

In 2025, growth for the region (excluding India) is expected to rise to 4%, with further improvement to 4.3% by 2026.

The report also highlighted challenges in Bangladesh, where political turmoil in mid-2024 weakened activity and investor confidence.

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