A World Bank report on growth estimates for South Asia said India's economic growth is expected to remain stable for the next two fiscal years from April 2025. India's growth is projected to remain steady at 6.7 percent per annum for the next two fiscal years from April 2025, the World Bank said. Growth in South Asia is expected to pick up to 6.2 percent in 2025-26, it 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 forecast to stabilize with rising private investment moderating public investment,” the bank said.
Meanwhile, India's growth is forecast to soften to 6.5 percent in 2024-25, reflecting a slowdown in investment and weak manufacturing growth. “However, private consumption growth remains resilient, driven primarily by improved rural incomes along with a recovery in agricultural production,” the World Bank said.
This is in line with what analysts and experts have predicted for FY25. According to the latest FICCI Economic Outlook, India's GDP growth is projected at 6.4 percent for 2024-25, down from 7.0 percent estimated in the previous survey conducted in September 2024.
According to the Ministry of Statistics and Program Implementation, the economy has seen a growth of 6.4 percent in this financial year. BofA Securities India estimates India's growth at 6.5 percent this fiscal, while Acuité Ratings & Research and CareEdge Ratings forecast GDP growth at 6.4 and 6.5 percent, respectively.
While Nomura forecasts growth of 6.7 percent this fiscal, the Reserve Bank of India lowered its GDP forecast for FY25 to 6.6 percent.
The economy grew by 7 percent in the last three fiscal years. GDP growth grew at 9.7% in FY22, 7% in FY23 and 8.2% in FY24.
Growth in South Asia
The World Bank estimates that the region, excluding India, will grow by 3.9 percent in 2024, reflecting the recovery in Pakistan and Sri Lanka and improving macroeconomic policies. In 2025, excluding India, growth is expected to pick up to 4 percent, followed by 4.3 percent in 2026.
“In Bangladesh, political turmoil in mid-2024 weighed on activity and eroded investor confidence. Reflecting supply constraints, energy shortages and import restrictions, industrial activity weakened and increased price pressures.