New Delhi
The World Bank has revised India’s economic growth forecast for FY25 from 6.6% to 7%, according to the latest India Development Update. This revision reflects India’s resilience amid challenging global economic conditions. The report notes that India remains the fastest-growing major economy, with an 8.2% growth rate in FY23/24. This growth was driven by public infrastructure investments and increased household investments in real estate. On the supply side, manufacturing grew by 9.9%, and services activity remained strong, offsetting weaker performance in the agriculture sector.
Urban unemployment rates have gradually improved, with a notable decrease in the female unemployment rate to 8.5% in early FY24/25. However, urban youth unemployment remains high at 17%. India’s foreign exchange reserves reached a record high of USD 670.1 billion in early August, providing over 11 months of import cover. This was supported by a narrowing current account deficit and strong foreign portfolio investment inflows.
Despite global economic challenges, the World Bank’s outlook for India is positive, with growth projected at 7% in FY24/25 and expected to remain strong through FY26/27. The report also anticipates a decrease in India’s debt-to-GDP ratio to 82% by FY26/27 and a stable current account deficit. The report highlights the importance of trade in sustaining India’s economic growth and suggests further reducing trade costs, lowering barriers, and deepening trade integration to boost exports.
