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

India’s economic growth is expected to remain steady for the next two fiscal years, beginning April 2025, said a World Bank report on growth estimates for South Asia. The World Bank said that India’s growth is projected to remain steady at 6.7 per cent a year for the next two fiscal years, beginning April 2025. Growth in South Asia is expected to rise to 6.2 per cent 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 projected to be steady, with moderating public investment offset by rising private investment,” the bank said.

Meanwhile in 2024-25, growth in India is projected to soften to 6.5 per cent, reflecting a slowdown in investment and weak manufacturing growth. "However, private consumption growth has remained resilient, primarily driven by improved rural incomes accompanied by a recovery of agricultural output,” the World Bank said.

This is in line with what analysts and experts have predicted for FY25. As per the latest FICCI Economic Outlook Survey, India’s GDP growth for 2024-25 is projected to be 6.4 per cent, a dip from the 7.0 per cent estimated in the previous survey conducted in September 2024.

According to the Ministry of Statistics and Programme Implementation too,  the economy is seen growing at 6.4 per cent this fiscal. BofA Securities India pegged India’s growth this fiscal at 6.5 per cent, while Acuité Ratings & Research and CareEdge Ratings predicted a GDP growth of 6.4 per cent and 6.5 per cent respectively. 

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

For the past three financial years, the economy grew 7 per cent. GDP growth came in at 9.7 per cent in FY22, 7 per cent in FY23, and 8.2 in FY24. 

SOUTH ASIA GROWTH

The World Bank estimates the region, except India, to grow 3.9 per cent in 2024, indicating recoveries in Pakistan and Sri Lanka, and improved macroeconomic policies. In 2025, growth, excluding India, is expected to grow to 4 per cent, and subsequently to 4.3 per cent in 2026. 

“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 report said.