World Bank Raises India's GDP Forecast to 7% for FY25 – Crucial Economic Indicator

World Bank Upgrades GDP Forecast for India

The World Bank has revised its growth forecast for India, upgrading it to 7% for the financial year 2024-25, an increase from the earlier estimate of 6.6%. This adjustment reflects the strong performance of the Indian economy, which was the fastest-growing major economy in FY24 with an 8.2% growth rate.

Positive Outlook Ahead

According to Auguste Tano Kouame, the World Bank's Country Director for India, "India was the fastest growing economy in FY24 at 8.2%, and now it's growing at a good pace." He also noted that global growth remains subdued compared to pre-pandemic levels. Looking ahead, the World Bank expects India's medium-term outlook to remain positive, with strong growth projected for FY26 and FY27.

• Kouame emphasized the need for diversifying India’s export basket.
• The goal is to achieve $1 trillion in merchandise exports by 2030.
• India's proactive approach to free trade agreements supports economic resilience.

Debt-to-GDP Ratio and Current Account Deficit

The World Bank projects a gradual decline in India's debt-to-GDP ratio, from 83.9% in FY24 to 82% by FY27. Meanwhile, the current account deficit is expected to stay within the range of 1-1.6% of GDP up to FY27.

Strategic Growth through Trade

Kouame highlighted, "India's robust growth prospects along with declining inflation will help to reduce extreme poverty. India can boost its growth further by harnessing its global trade potential." He pointed out the importance of expanding exports in various sectors such as textiles, apparel, footwear, electronics, and green technology.

The World Bank's updated forecast signals strong confidence in India's economic trajectory, driven by strategic policy initiatives and a focus on expanding trade and exports.