World Bank Projects India's Growth At 6.7% For Next Two Fiscal Years

"However, private consumption growth has remained resilient, primarily driven by improved rural incomes accompanied by a recovery of agricultural output,” the World Bank said

India's economic growth is expected to remain steady at 6.7 per cent annually over the next two fiscal years starting April 2025, according to the World Bank's latest growth estimates for South Asia. The World Bank also projected South Asia's growth to rise to 6.2 per cent in 2025-26, driven by strong growth in India.

“In India, growth is projected to remain steady, at 6.7 per cent a year for the two fiscal years beginning in April 2025," the report said.

"The services sector is expected to enjoy sustained expansion, and manufacturing activity will strengthen, supported by government initiatives to improve the business environment. Investment growth is projected to be steady, with moderating public investment offset by rising private investment,” the bank added.

India's growth is projected to slow to 6.5 per cent in the fiscal year 2024-25 (April 2024 to March 2025), reflecting a slowdown in investment and subdued manufacturing growth, according to the World Bank report.

"However, private consumption growth has remained resilient, primarily driven by improved rural incomes accompanied by a recovery of agricultural output,” the World Bank said.

Excluding India, growth in the region is estimated to have increased to 3.9 per cent in 2024, primarily driven by recoveries in Pakistan and Sri Lanka, supported by improved macroeconomic policies aimed at addressing previous economic challenges.

“In Bangladesh, political turmoil in mid-2024 weighed on activity and deteriorated investor confidence. Supply constraints, reflecting energy shortages and import restrictions, weakened industrial activity and led to increased price pressures,” the World Bank report said.

Growth in the region, excluding India, is expected to strengthen to 4 per cent in the year 2025 and 4.3 per cent in 2026. However, the forecast for this year has been slightly revised downward, primarily due to a downgrade for Bangladesh amid economic and policy uncertainty in the country.