New Delhi
According to the latest growth projections of the World Bank for South Asia, India’s economic growth rate is expected to remain stable at 6.7 percent per year for the next two financial years from April 2025. The World Bank said on Thursday, the growth rate in South Asia is expected to increase to 6.2 percent in the financial year 2025-26. This includes strong growth in India.
Estimate of 6.7% growth in FY26, FY27
It said, “The growth rate in India is expected to remain stable at 6.7 percent per year in the next two financial years from April 2025.” The bank said, “Continuous expansion in the service sector is expected. Manufacturing activity will be strong, supported by government initiatives to improve the business environment. Investment growth is expected to remain stable and the increase in private investment will compensate for the slowdown in public investment.
Estimate of 6.5% growth in FY25
India’s growth rate is expected to decline to 6.5 percent in the financial year 2024-25 (April 2024 to March 2025), which reflects a slowdown in investment and weak growth of the manufacturing sector. Apart from India, the growth rate in this region is estimated to increase to 3.9 percent in 2024. This mainly reflects the improvement in Pakistan and Sri Lanka, which is the result of better macroeconomic policies adopted to overcome economic difficulties.
According to the data released by the World Bank, the economy in South Asia can grow at a pace of 6.2 percent in the financial year 2025-26. Talking about India, the growth will remain stable at 6.7 percent for the next two financial years. Talking about this financial year 2025, the World Bank estimates that the economic growth in India will slow down to 6.5 percent, which shows slowness in investment and weak manufacturing growth.
Service sector growth expected to continue
According to the World Bank, economic growth will accelerate in the next financial year and will increase from 6.5 percent growth to 6.7 percent in this financial year 2025. This growth is going to continue for the next two financial years. According to the World Bank, government efforts to improve the business environment will strengthen manufacturing activity and the growth of the services sector will continue. However, investment growth remained stable It may remain the same but private investment will increase.
Apart from India, what will be the situation in other countries?
According to the World Bank, except India, the growth of other countries of South Asia may increase to 3.9 percent in the year 2024. It will get support from recovery in Pakistan and Sri Lanka. In both these countries, the reforms made in macroeconomic policies to deal with the earlier economic challenges provided support to the economy. Due to political instability in Bangladesh, investor confidence was shaken and activities were also affected. Power shortage and ban on imports weakened industrial activity and created inflationary pressure.
Due to the political instability of Bangladesh, the World Bank has reduced its forecast for South Asia apart from India to 4 percent for the year 2025 and 4.3 percent for the year 2026. In Bangladesh, growth may fall to 4.1 percent in fiscal year 2025 (July 2024 to June 2025) and then reach 5.4 percent in fiscal year 2025-26 (July 2025-June 2026).