India’s GDP growth rate to remain steady at 6.7% for next two fiscal years: World Bank

India’s economic growth is expected to remain flat over the next two fiscal years, starting April 2025, according to a World Bank report on South Asia growth estimates. India’s growth is expected to remain steady at 6.7 percent annually for the next two fiscal years, starting April 2025, the World Bank said. Growth in South Asia is expected to rise to 6.2 percent in 2025-26.

The bank said: “The services sector is expected to enjoy a sustainable expansion, and manufacturing activity will enhance, with support from government initiatives to improve the business environment. Investment growth is expected to be stable, with moderate public investment offset by a rise in private investment.”

Meanwhile, in 2024-25, growth in India is expected to decline to 6.5%, reflecting slower investment and weak manufacturing growth. “However, private consumption growth remained resilient, driven primarily by improved incomes in rural areas accompanied by a recovery in agricultural production,” the World Bank said.

This is in line with what analysts and experts have forecast for FY25. According to the latest CICI Economic Outlook Survey, India’s GDP growth for 2024-25 is expected to be 6.4 per cent, a decline from the 7.0 per cent estimated in the survey. The previous one was conducted in September 2024.

Also according to the Ministry of Statistics and Program Implementation, the economy is expected to grow by 6.4 percent this fiscal year. BofA Securities India pegged India’s growth this fiscal at 6.5 per cent, while Acuité Ratings & Research and CareEdge Ratings forecast GDP growth at 6.4 per cent and 6.5 per cent, respectively.

Nomura forecast 6.7 per cent growth this fiscal, while the Reserve Bank of India lowered its FY25 GDP forecast to 6.6 per cent.

Over the past three fiscal years, the economy has grown by 7 percent. GDP growth was 9.7 percent in FY22, 7 percent in FY23, and 8.2 percent in FY24.

Growth in South Asia

The World Bank estimates that the region, excluding India, will grow by 3.9% in 2024, indicating recovery in Pakistan and Sri Lanka, and improving macroeconomic policies. In 2025, growth, excluding India, is expected to grow to 4 percent, then to 4.3 percent in 2026.

In Bangladesh, political turmoil in mid-2024 affected activity and investor confidence deteriorated. The report said supply constraints, reflecting energy shortages and restrictions on imports, weakened industrial activity and led to increased price pressures.