
The latest World Bank report on growth estimates for South Asia indicates that India is expected to sustain a steady economic growth rate of 6.7% per year for the next two fiscal years starting from April 2025. The report highlights that the services sector in India is poised for sustained expansion while manufacturing activity is expected to strengthen, boosted by government efforts to enhance the business environment. Additionally, investment growth is forecasted to be stable, with a decrease in public investment balanced out by an increase in private investment.
In contrast, for the fiscal year 2024-25, India's growth is predicted to soften to 6.5%, reflecting a slowdown in investment and sluggish manufacturing growth. However, the report notes that private consumption growth remains robust, primarily due to improved rural incomes alongside a recovery in agricultural output. Analysts and experts have also echoed similar sentiments regarding India's GDP growth, with projections ranging from 6.4% to 6.7% for the upcoming years based on various economic outlook surveys and forecasts from entities like FICCI, BofA Securities India, Acuité Ratings & Research, CareEdge Ratings, Nomura, and the Reserve Bank of India.
The World Bank further discusses the economic outlook for the region, excluding India, with growth estimates of 3.9% in 2024 and projections of 4% in 2025, and 4.3% in 2026. Notably, recoveries are anticipated in countries like Pakistan and Sri Lanka, with improved macroeconomic policies contributing to the overall growth. The report also mentions challenges faced by countries like Bangladesh, where political unrest and supply constraints have affected economic activity, leading to increased price pressures.