The World Bank has raised its GDP growth forecast for India by 20 basis points to 6.6 per cent for the financial year FY25.
It has also raised the forecast for the year ended March 31 by a massive 120 bps to 7.5 per cent on the back of robust growth in the October-December period, when the economy grew a whopping 8.4 per cent against expectations of around 6.6 per cent, the World Bank said.
“Growth is expected to moderate to 6.6 per cent in FY2024-25 before picking up in subsequent years as a decade of robust public investment yields growth dividends,” the World Bank said in its April edition of the ‘South Asia Development Update’ report.
The multilateral agency expects GDP growth to moderate in 2024-25 primarily because of a deceleration in investment from its elevated pace in the previous year.
On the other hand, growth in services and industry is expected to remain robust, the World Bank said, adding that industry is likely to be aided by strong construction and real estate activity.
Even as the World Bank has raised the growth forecasts for both 2023-24 and2024-25, its projections are lower than those of the government and the Reserve Bank of India.
According to the government’s second advance estimate, GDP growth is estimated at 7.6 per cent for the year ended March 31. Finance minister Nirmala Sitharaman last week said the economy is likely to have grown at 8 per cent or higher in 2023-24.
For the current financial year, the government and the central bank expect GDP growth of 7 per cent or higher.