The World Bank has significantly raised its growth forecast for India, projecting an impressive 7% growth for the current financial year, up from a previous estimate of 6.6%. This revision is primarily attributed to increased government spending on infrastructure and a surge in household investments in real estate. According to the World Bank’s India Development Update report, these factors have played a pivotal role in driving the country's economic expansion.

The report highlights a robust 9.9% growth in the manufacturing sector, which has bolstered India's economic performance on the supply side. Additionally, the resilience of the services sector has helped offset the weaker performance in agriculture, which has been a challenge in recent times. Despite a slowdown to 6.7% growth during the April-June 2024-25 quarter, largely due to underperformance in agriculture and services, India recorded an impressive 8.2% growth in FY24, solidifying its position as the fastest-growing major global economy.

Auguste Kouame, the World Bank’s Country Director for India, emphasized that India's dynamic growth amidst global challenges reduces the likelihood of falling into the middle-income trap, provided that current policies and reforms persist. This optimistic view is shared by other financial institutions as well. The International Monetary Fund (IMF) has revised its GDP growth forecast for FY25 to 7%, aligning with the World Bank's updated projection. Similarly, Moody’s Ratings has increased its projection for 2024 to 7.2%.

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Looking ahead, the World Bank’s medium-term outlook remains positive. It projects a GDP growth of 6.7% for both FY26 and FY27. However, the report also notes high youth unemployment at around 17% and a decline in direct employment related to exports as areas of concern. Inflation is expected to be at 4.5% for FY25, with a gradual decrease to 4.1% in FY26 and 4% in FY27. The World Bank recommends a monetary policy that targets both core and headline inflation to manage these economic challenges effectively.

India’s growth trajectory, driven by strategic infrastructure investments and robust sectoral performance, reflects its potential to maintain momentum and address economic challenges head-on. For further insights into India’s economic outlook and strategic developments, explore our Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News.

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