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World Bank raises GDP projection, says India to keep its fastest-growing economy tag

Representative Image (Photo: ANI)

The World Bank has upwardly revised India’s GDP growth forecast for the current financial year 2024-25 by 20 basis points to 6.6 per cent from its earlier projection of 6.4 per cent made in January.

World Bank said India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate.

In its latest Global Economic Prospects report, the international financial institution attributed the revision in India’s growth projections to strong public investment accompanied by private capex and rise in private consumption.

Growth in India’s industrial activity, including manufacturing and construction, was stronger than expected, alongside resilient services activity, which helped offset a slowdown in agricultural production partly caused by monsoons.

Growth of domestic demand remained robust, with a surge in investment, including in infrastructure, offsetting a moderation of consumption growth as post-pandemic pent-up demand eased.

For 2025-26, World Bank similarly raised the growth projections from 6.5 per cent to 6.7 per cent.

“India’s economy has been buoyed by strong domestic demand, with a surge in investment, and robust services activity. It is projected to grow an average of 6.7 percent per fiscal year from 2024 through 2026–making South Asia the world’s fastest-growing region,” the World Bank report read.

GDP per capita in EMDEs (emerging market and developing economies), which include India, is forecast to grow at about 3 per cent on average over 2024-26, well below the average in 2010-19.

“Some large EMDEs, such as India, are expected to see continued solid per capita growth,” it said.

Activity in commodity importers excluding China has been robust. “This mostly reflects resilience in some large economies, notably India, owing to continued strength in domestic demand. Growth has been more muted in other commodity importers so far this year.”

According to official data of the Indian government, its GDP grew at a massive 8.2 per cent during the financial year 2023-24, and the country continued to remain the fastest-growing major economy. India’s economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively.

The Reserve Bank of India in its latest monetary policy meeting raised the GDP forecast for the current for 2024-25 to 7.2 per cent from 7 per cent earlier.

Morgan Stanley forecasts 6.8 per cent growth in India in 2024.

India is set to remain the fastest-growing among major economies in 2024, according to latest International Monetary Fund’s latest World Economic Outlook. IMF, in its latest outlook, raised India’s growth projections for 2024 from 6.5 per cent to 6.8 per cent.

The United Nations recently upwardly raised India’s economic growth projections for 2024 from 6.2 per cent to 6.9 per cent mainly driven by strong public investment and resilient private consumption.

Moody’s Ratings expects India to grow at 6.6 per cent in the current financial year 2024-25.

Organisation for Economic Co-operation and Development (OECD) projects India to grow 6.6 per cent in the next two years.

The Asian Development Bank (ADB) had upgraded India’s gross domestic product (GDP) growth forecast for financial year 2024 from 6.7 per cent to 7 per.