Indian Economy: World Bank Ups India's FY25 Growth Forecast to 7%

The World Bank has revised its growth prediction for India. It increased the prediction from 6.6% to 7% for the financial year 2024–2025. The announcement was made in a study titled "India Development Update: India’s Trade Opportunities in a Changing Global Context," which was made public on Tuesday.

Many positive aspects of the Indian economy came into light in this report. There were many factors that affected the economy in a positive way, thus increasing the growth prediction for India.

Check the key findings of the report below.

World Bank Report: Key Features

Check the key features of the India Development Update Report issued by the World Bank:

• Strong Growth: India remained the fastest-growing major economy, with an impressive 8.2% growth rate in FY23/24. The reason for this growth is significant public infrastructure projects and household investment increases in real estate.
• Manufacturing Boost: The manufacturing sector saw significant expansion, growing by 9.9%, contributing to the growing economy.
• Resilient Services Sector: The services sector strengthened the Indian economy, despite weaker performance in agriculture.
• Positive Outlook: The World Bank expects India to maintain economic growth and stability in the coming years.
• Debt Reduction: India's debt-to-GDP ratio is projected to decrease from 83.9% in FY23/24 to 82% by FY26/27. This reduction is supported by stgdp,gdp  rong revenue growth and fiscal discipline.
• Stable Current Account Deficit: The current account deficit is expected to remain stable, between 1-1.6% of GDP, up to FY26/27.

Employment Status in India

The India Development Update (IDU) also noted that as more women enter the workforce, urban unemployment has steadily improved. Early in FY24/25, female urban unemployment decreased to 8.5%, while urban youth unemployment remained high at 17%. 

India's growing foreign exchange reserves were also noted in the World Bank report. As per the Report, the reserves reached a record high of $670.1 billion in early August. This was due to a smaller current account deficit and strong inflows from foreign portfolio investments. As per the report, these reserves are enough to cover over 11 months of imports for the country.