World Bank Revises India's Growth Rate to 7% for 2024-25 Financial Year
The World Bank has revised its growth forecast for India's economy, projecting a 7% growth rate for the financial year 2024-25. This adjustment, announced in a report released on Tuesday, reflects an increase from the previous estimate of 6.6%.
The new forecast aligns with projections from the International Monetary Fund (IMF) and the Asian Development Bank (ADB), both of which also anticipate a 7% growth rate for the same period. This is notably higher than the central government's estimate of 6.5% to 7%, and the Reserve Bank of India's (RBI) forecast of 7.2%.
Ran Li, a senior economist at the World Bank, attributed the upward revision to several factors. "Improved monsoon conditions, increased consumer spending on goods and services, and higher export volumes have contributed to the acceleration of economic growth," Li said.
Despite external challenges, Li expressed a positive mid-term outlook for India's economy, with robust growth expected to continue into the 2025-26 and 2026-27 financial years. However, he emphasized the need for India to create more job opportunities through trade-related initiatives.
August Tano Kaume, the World Bank’s Director for India, highlighted that India's strong growth prospects and declining inflation rates could significantly reduce extreme poverty. "By enhancing its global trade capabilities, India can further increase its growth rate. Diversifying exports in sectors such as IT, business services, pharmaceuticals, jewelry, apparel, footwear, electronics, and green technologies will be crucial," Kaume added.
He also noted that the recovery in the agricultural sector is likely to boost rural consumption. To achieve the goal of reaching $1 trillion in merchandise exports by 2030, India will need to diversify its export base and reduce trade costs and barriers.
Overall, the revised growth rate underscores a promising economic trajectory for India, supported by various positive domestic and international factors.