The World Bank has maintained its economic growth projection for India at 6.4% for the fiscal year 2025. This outlook is attributed to robust domestic demand, increased public infrastructure spending, and strong private-sector credit growth.
However, concerns over high food inflation and diminishing pent-up demand may lead to a tapering off in private consumption growth. The biannual ‘Global Economic Prospects’ report indicates that India is expected to sustain the fastest growth rate among the world’s largest economies.
Despite an estimated growth of 6.3% in FY24, the post-pandemic recovery is anticipated to slow, gradually reaching 6.5% in FY26. Contrarily, the World Bank expressed less optimism about the global economic scenario.
The global economy is projected to experience a slowdown for the third consecutive year in 2024, hindered by factors such as high interest rates, persistent inflation, declining trade, and a weakened China.
The organization forecasts a 2.4% expansion in the world economy for the current year, down from 2.6% growth in 2023, 3% in 2022, and a notable 6.2% recovery in 2021 following the pandemic-induced recession in 2020.
Notably, the World Bank’s prediction for India doesn’t account for the National Statistical Office’s (NSO) first advance estimates, which indicated a 7.3% growth for India in FY24—higher than the Reserve Bank of India’s estimate of 7%. The NSO’s figures assumed an investment-led recovery.
