The World Bank revised its growth prediction for India, increasing it from 6.6% to 7% for 2024–2025. The announcement was made in a study titled “India Development Update: India’s Trade Opportunities in a Changing Global Context,” which was made public on Tuesday. According to the research, India continued to be the major economy with the greatest growth rate, expanding at a sharp 8.2 percent annual rate in FY23/24 because of increases in household real estate investments and public infrastructure spending. It further stated that robust services activity made up for agriculture’s poor performance, and the manufacturing sector, which expanded by 9.9%, helped to support the expansion in the services sector.
The India Development Update (IDU) also noted that as more women enter the workforce, urban unemployment has steadily improved. Early in FY24/25, female urban unemployment decreased to 8.5%, while urban youth unemployment remained high at 17%. It said that strong inflows of foreign portfolio investments and a narrowing of the current account deficit caused foreign exchange reserves to rise to an all-time high of $670.1 billion in early August, which is more than 11 months’ worth of cover.
The medium-term forecast for India is expected to remain favorable by the World Bank. The debt-to-GDP ratio is expected to decrease from 83.9% in FY23/24 to 82% in FY26/27 with strong revenue growth and additional fiscal reduction. Furthermore, until FY26/27, the current account deficit is predicted to stay at a level of 1.1–1.6 percent of GDP.
India is predicted to have robust growth in the future; FY26 growth is projected to be 6.7%. The research further said that FY27 would see growth of 6.8%.
By utilizing its potential for international trade, India may accelerate its rise even more. India can expand its export portfolio by increasing its exports of electronics, green technology items, textiles, garments, and footwear in addition to its strengths in IT, business services, and pharmaceuticals.
In addition, the IDU suggested a three-pronged strategy that would involve significantly cutting trade costs, lowering trade barriers, and strengthening trade integration to reach the $1 trillion merchandise export goal.
