The World Bank has increased its growth forecast for India in FY25 to 7%, up from the earlier estimate of 6.6%. This adjustment highlights expectations for continued robust economic performance in the medium term.

India's GDP growth slowed to 6.7% in the April-June quarter, primarily due to reduced government spending linked to the Model Code of Conduct during the General Elections, according to data released on August 30.

In contrast, the Reserve Bank of India (RBI) projected a 7.1% growth rate for the first quarter of FY25 in its latest Monetary Policy Committee meeting held in August.

Following the GDP slowdown in the first quarter, Nomura revised its forecast for India down to 6.7% from 6.9%. Meanwhile, Goldman Sachs and J.P. Morgan have kept their growth forecast for India at 6.5% for FY25.

Recent data also indicates a decline in the primary sector, which includes agriculture and mining, growing by only 2.7% annually compared to 4.2% in the same period of FY24. On the other hand, the secondary sector, which covers manufacturing and electricity, saw a significant annual growth of 8.4%. However, the tertiary sector, which encompasses services, decreased to 7.2% growth annually from 10.7% in FY24.

India’s GDP grew by 8.2% in FY24, surpassing the 7% growth rate recorded in FY23, according to estimates from the National Statistical Office (NSO). This marks a notable acceleration in economic expansion, reflecting the country’s robust economic performance over the past year.

In July, the International Monetary Fund (IMF) revised its forecast for India's GDP growth in the current fiscal year (FY25), increasing it by 20 basis points to 7%. This adjustment underscores the IMF's positive outlook on India's economic prospects for the ongoing year.

Similarly, the World Bank also updated its growth forecast for India in June, raising it by 20 basis points to 6.6% for FY25. The World Bank attributed this upward revision to the strong growth momentum observed in India, highlighting the country’s resilience and continuing economic strength despite global uncertainties.

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