World Bank raises India’s FY25 growth forecast to 6.6%

The World Bank raised India’s growth projection for the current fiscal to 6.6%, compared with 6.4% estimated earlier, driven by domestic demand.
“India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate. After a high growth rate in FY24 (8.2%), steady growth of 6.7% per year, on average, is projected for the three fiscal years beginning in FY25. This moderation is mainly due to a slowdown in investment from a high base,” it said in the latest Global Economic Prospects.
The multilateral agency said that investment is expected to remain strong for the next three years with strong public investment accompanied by the private sector. “Private consumption growth is expected to benefit from a recovery of agricultural production and declining inflation. Govt consumption is projected to grow only slowly, in line with the govt’s aim of reducing current expenditure relative to GDP,” the World Bank said. It also said that strong revenue flows are expected to help reduce the fiscal deficit.
For South Asia, it, however, cautioned against the risk of commodity price spikes due to geopolitical tensions as well as climate change and cited higher than expected US growth and faster moderation in inflation as potential upsides.