Good news! World Bank raises India’s GDP growth forecast to 7% for FY25

| TOI Business Desk | TIMESOFINDIA.COM | Sep 3, 2024, 12:34 IST

The World Bank has raised its forecast for India's economic growt... Read More

Indian economy on a strong footing! The World Bank has revised upwards its projection for India's economic growth in the current fiscal year, increasing it to 7% from its previous estimate of 6.6%.

The Indian economy grew at 6.7% in the first quarter of FY 2024-25, according to government data last week. The slowdown was attributed to reduced government expenditure during the period of national elections.

Despite this, India retained its status as the world's fastest-growing major economy, surpassing China's 4.7% growth rate in the corresponding period.

Economic experts predict that the slowdown will be temporary, as declining inflation rates and heightened government spending are likely to stimulate growth in the forthcoming months.

The Gross Value Added (GVA), which economists consider a more accurate indicator of economic growth, showed an increase of 6.8% in the April-June quarter compared to the same period last year. This marks an improvement from the 6.3% GVA growth recorded in the previous quarter.

Last week, Moody's also revised its growth forecast for India, projecting a higher GDP growth rate for 2024 and 2025. The agency cited indications of strengthening rural demand as the primary reason behind the upward revision.

According to the revised estimates, India's economy is expected to grow by 7.2% in 2024, up from the previous projection of 6.8%. Similarly, the growth forecast for 2025 has been raised to 6.6% from the earlier estimate of 6.4%. Moody's stated, "These forecast changes assume strong broad-based growth and we recognize potentially higher forecasts if the cyclical momentum, especially for private consumption, gains more traction."

The agency also highlighted the robust performance of both the industrial and services sectors in India. It pointed out that the services Purchasing Managers' Index (PMI) has consistently remained above 60 since the beginning of the year, indicating a strong expansion in the sector.

Additionally, Fitch, a prominent credit rating agency, has maintained India's long-term foreign currency issuer rating at 'BBB-' with a stable outlook. The decision was based on the country's robust medium-term growth prospects, which are expected to continue driving improvements in key structural aspects of its credit profile. These improvements include India's increasing share of global GDP and its strong external finance position.

The agency also noted that India's fiscal credibility has been bolstered by meeting deficit targets, coupled with increased transparency and healthy revenues. These factors have raised the probability of a moderate decline in government debt over the medium term, further supporting the stable outlook for the country's credit rating.

Top 10 Fastest Growing Major Economies In The World 2024

Top 10 fastest growing major economies 2024: Which are the top 10 fastest growing major economies in the world? This is one ranking in which India beats the United States of America and China! For the purpose of arriving at the list of the fastest growing major economies for 2024, we have short-listed the world’s top 25 largest economies in the world by nominal GDP size. These economies have then been ranked in terms of the highest GDP growth rate for 2024 as projected by the International Monetary Fund (IMF) in its latest World Economic Outlook. We take a look at the top 10 fastest growing major economies in the world for 2024: (AI image)

India is the fastest growing major economy in the world according to the IMF’s World Economic Outlook Update - July 2024. IMF projects that India’s economy will grow at 7% in 2024 and 6.5% in 2025. In terms of GDP, India is currently the world’s fifth largest economy and is slated to become the third largest in the coming years. (AI image)

China is the world’s second fastest growing major economy with a projected GDP growth rate of 5% in 2024 and 4.5% in 2025, according to the IMF. In nominal GDP terms, China is currently the world’s second largest economy. (AI image)

Indonesia ranks 3rd on this list with an expected GDP growth rate of 5% in 2024, as per IMF data. The IMF projects that Indonesia’s economy will grow at 5.1% in 2025. Indonesia currently holds the 16th rank in the world’s largest economies list. (AI image)

Turkey is 4th on the list of the world’s top 10 fastest growing major economies in the world. IMF estimates that Turkey’s GDP will grow at 3.6% in 2024. The growth rate is expected to dip to 2.7% in 2025. At present, Turkey is the world’s 18th largest economy. (AI image)

Russia ranks fifth in the list of the world’s top 10 fastest growing major economies. According to IMF, Russia’s GDP expected to grow at 3.2% in 2024. However the GDP growth will dip significantly to 1.5% in 2025, projects IMF. Russia is currently the 11th largest economy in the world in terms of nominal GDP. (AI image)

Poland holds the 6th rank in the top 10 fastest growing major economies list for 2024. As per IMF’s latest estimates, Poland’s economy will grow at 3.1% in 2024 and this growth rate will rise to 3.5% in 2025. Poland ranks 21st on the list of the largest economies in the world. (AI image)

United States ranks 7th in the top 10 fastest growing major economies list for 2024. The US economy is expected to grow at 2.6% in 2024, according to IMF. This growth will likely dip to 1.9% in 2025, says IMF. The United States of America is currently the world’s largest economy in nominal GDP terms. (AI image)

South Korea, which ranks 8th in the top 10 fastest growing major economies list, is expected to grow at 2.5% in 2024. IMF’s latest estimates project that the GDP growth will slow to 2.2% in 2025. Korea is at present the world’s 14th largest economy. (AI image)

Spain is among the top 20 largest economies in the world. It ranks 9th on the list of the world’s fastest growing major economies list. According to the IMF, Spain’s economy will grow at 2.4% in 2024 and 2.1% in 2025. In nominal GDP terms, Spain is the 15th largest economy in the world. (AI image)

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Top Comment

Krishnan Krishnan

92 days ago

If it was our pappu ruling, it would have been 70%. The respected #ghatiyabandhanias to stage bharat bandh for just 7%

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