India’s economic growth is expected to remain flat for the next two fiscal years, starting in April 2025, according to a World Bank report on growth estimates for South Asia. The World Bank said India’s growth is expected to remain flat at 6.7 percent annually over the next two fiscal years, starting in April 2025. Growth in South Asia is expected to increase to 6.2% by 2025-26, he said.

“The services sector is expected to enjoy sustained expansion and manufacturing activity will strengthen, supported by government initiatives to improve the business environment. Investment growth is expected to be steady, with moderation in public investment offset by increased private investment,” the bank said.

Meanwhile, in 2024-25, growth in India is expected to slow to 6.5%, reflecting a slowdown in investment and weak manufacturing growth. “Nevertheless, private consumption growth has remained resilient, driven mainly by improved rural incomes accompanied by a recovery in agricultural production,” the World Bank said.

This is in line with what analysts and experts have predicted for FY 25. According to the latest FICCI Economic Outlook Survey, India’s GDP growth for 2024-25 is projected to be 6.4 percent, down from the 7.0 percent estimated in the previous survey conducted in September 2024.

According to the Ministry of Statistics and Program Implementation as well, it can be seen that the economy is growing by 6.4 percent this fiscal year. BofA Securities India pegged India’s growth this fiscal at 6.5%, while Acuité Ratings & Research and CareEdge Ratings predicted GDP growth of 6.4% and 6.5%, respectively.

Nomura forecast 6.7% growth this fiscal, while the Reserve Bank of India cut its FY25 GDP forecast to 6.6%.

Over the past three years, the economy grew by 7 percent. GDP growth was 9.7% in FY22, 7% in FY23 and 8.2% in FY24.

GROWTH OF SOUTH ASIA

The World Bank estimates that the region, excluding India, will grow by 3.9% in 2024, indicating recoveries in Pakistan and Sri Lanka and improved macroeconomic policies. In 2025, growth excluding India is expected to grow to 4% and then 4.3% in 2026.

“In Bangladesh, political turmoil in mid-2024 weighed on activity and eroded investor confidence. Supply constraints, reflecting energy shortages and import restrictions, weakened the ‘industrial activity and led to increased price pressures,’ the report said.