World Bank raises India's growth forecast to 7% for FY25
The World Bank has revised India's growth forecast for the fiscal year 2025, raising it from an initial projection of 6.6% to a more optimistic figure of 7%. This upward revision comes despite a slowdown in the country's GDP growth to 6.7% during the April-June quarter, as reported by government data on August 30. The deceleration was attributed to reduced government spending due to the enforcement of a Model Code of Conduct for General elections.
RBI's growth projection and Nomura's revised forecast
In its last Monetary Policy Committee meeting in August, the Reserve Bank of India (RBI) had predicted a GDP growth rate of 7.1% for the first quarter of FY25. However, following the GDP slowdown in Q1, global financial services group Nomura downgraded its forecast for India from 6.9% to 6.7%. State Bank of India (SBI), India's largest commercial bank, has also lowered its full-year growth projection to 7%, following the dip in India's Q1 FY25 growth.
Goldman Sachs and J.P. Morgan maintain steady growth forecast
Despite the GDP slowdown in Q1, both Goldman Sachs and J.P. Morgan have maintained their growth forecasts for India's economy at 6.5% for FY25. This consistency suggests a level of confidence in the resilience of the Indian economy, even amid fluctuations in quarterly performance. These projections are particularly significant given India's status as the world's fifth-largest economy by nominal GDP and third-largest by purchasing power parity (PPP).
Sector-wise performance of India's economy in FY25
Recent data indicates a mixed performance across different sectors of India's economy. The primary sector, which includes agriculture and mining industries, saw a decline of 2.7% on an annual basis compared to a growth of 4.2% in FY24. On the other hand, the secondary sector comprising manufacturing and electricity industries recorded significant growth at 8.4%. However, the tertiary sector experienced a dip to 7.2% annually from its previous growth rate of 10.7%.
