The World Bank upgraded India’s GDP growth forecast by 0.4% to 7% in FY 2025 despite ongoing external economic turbulences, war, and post-pandemic rebound effects. They further mentioned that geopolitical tensions could inflate commodity prices, and resurgent inflation will keep global interest rates high for a long time.
The report mentioned, “These risks notwithstanding, medium-term prospects are positive. The significant expansion of public investment in recent years should crowd in corporate investments, and a recovery of agriculture and declining inflation should boost private consumption growth. Under this baseline scenario, robust growth and declining inflation are expected to reduce extreme and moderate poverty.”
The World Bank Report also mentioned that the sustained growth rate of the service sector in India. This includes expansion in GCC (Global Capacity Centre), growth in the manufacturing sector, Government initiatives, improved logistics, and more. Moreover, the growth rate of imports is estimated to be 4.1% in FY25, which is significantly lower as compared to 10.9% in FY24. And Imports are expected to subsequently increase to 6.3% in FY26 and 7.3% in FY27
Apart from the GDP growth rate, urban youth unemployment is at 17%, and it is also mentioned that India is losing its share in labour-intensive sectors such as apparel and footwear.
