World Bank Upgrades India's FY25 GDP Growth Forecast to 7%: Report
Moneylife Digital Team 03 September 2024
The World Bank has increased its growth forecast for India's financial year 2024-25 to 7%, revising it from the previous estimate of 6.6%. This adjustment highlights the impressive performance of the Indian economy, which led major economies with an 8.2% growth rate in FY23-24 says a report from World Bank.
 
According to Auguste Tano Kouame, the World Bank's country director for India, the Indian economy is continuing its strong growth trajectory. However, he noted that global economic growth remains weak compared to pre-pandemic levels.
 
The World Bank anticipates a positive medium-term outlook for India, with strong growth expected for FY25-26 and FY26-27. Mr Kouame emphasised the need for India to diversify its export portfolio and leverage global value chains to achieve its target of US$1trn (trillion) in merchandise exports by 2030.
 
The World Bank also predicts a gradual reduction in India’s debt-to-GDP ratio, from 83.9% in FY23-24 to 82% by FY26-27. The current account deficit is expected to remain within 1-1.6% of GDP through FY26-27.
 
Mr Kouame highlighted India's proactive approach to free trade agreements as a significant factor in its economic stability. He further added that India’s robust growth prospects, combined with decreasing inflation, are likely to contribute to reducing extreme poverty. India has the potential to further enhance its growth by diversifying its export basket, particularly in textiles, apparel, footwear, electronics, and green technology, in addition to its strong sectors such as IT, business services, and pharmaceuticals.
 
The World Bank's revised forecast reflects strong confidence in India's economic trajectory, driven by strategic policy measures and a focus on expanding trade and exports.
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