world-bank-projects-india-s-growth-steady-at-6-7pc-till-2026

India's economic growth is forecast to remain steady at 6.7% per annum over the next two fiscal years beginning April 2025, according to the World Bank's latest growth estimates for South Asia.

 

Growth across South Asia is expected to rise to 6.2% in 2025–26, supported by firm growth projections for India, the World

Bank stated on Thursday.

 

“In India, growth is projected to remain steady at 6.7% a year for the two fiscal years beginning in April 2025,” the report noted.

 

The services sector is anticipated to continue its sustained expansion, while manufacturing activity is expected to strengthen, bolstered by government initiatives aimed at improving the business environment. Investment growth is projected to remain stable, with moderating public investment offset by a rise in private investment, the report said.

 

For fiscal year 2024–25 (April 2024 to March 2025), growth in India is projected to ease to 6.5%, reflecting a slowdown in investment and weak manufacturing activity, the report added.

 

“However, private consumption growth has remained resilient, primarily driven by improved rural incomes alongside a recovery in agricultural output,” the World Bank observed.

 

Excluding India, growth in South Asia is estimated to have risen to 3.9% in 2024, mainly due to recoveries in Pakistan and Sri Lanka, supported by improved macroeconomic policies implemented to address earlier economic challenges.

 

“In Bangladesh, political turmoil in mid-2024 dampened activity and eroded investor confidence. Supply constraints, stemming from energy shortages and import restrictions, weakened industrial activity and heightened price pressures,” the report stated.

 

Growth in the region excluding India is projected to strengthen to 4% in 2025 and to 4.3% in 2026. However, this year’s forecast is slightly lower than earlier estimates in June, primarily due to a downgrade for Bangladesh amid ongoing economic and policy uncertainty.

 

In Bangladesh, growth is expected to decline to 4.1% in FY2024–25 (July 2024 to June 2025) before rebounding to 5.4% in FY2025–26. Amid elevated political uncertainty, investment and industrial activity are likely to remain subdued in the near term, the report concluded.