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Informist, Wednesday, Apr. 23, 2025

 

NEW DELHI – The World Bank has lowered India's growth forecast for the current financial year owing to global economic weakness and policy uncertainty. The multilateral agency on Wednesday slashed India's GDP growth forecast for the current financial year that started in April by 40 basis points to 6.3%. It has forecasted India's GDP growth for FY25 at 6.5%.

 

"The benefits to private investment from monetary easing and regulatory streamlining are expected to be offset by global economic weakness and policy uncertainty. Private consumption is expected to benefit from tax cuts, and the improving implementation of public investment plans should boost government investment, but export demand will be constrained by shifts in trade policy and slowing global growth," the World Bank said in the April edition of its South Asia Development Update.

 

The World Bank's growth forecast for India in FY26 is less optimistic than the projections by the Reserve Bank of India. The Indian central bank earlier this month lowered India's GDP growth forecast for FY26 by 20 bps to 6.5%, citing the impact of global trade and policy uncertainties.

 

India's GDP is seen expanding 6.5% in FY25, as per the government's second advance estimate. On Tuesday, the International Monetary Fund also cut India's GDP growth forecast for FY26 by 30 basis points to 6.2%.

 

According to the multilateral development bank, the correction in stock market valuations, after peaking late last year, has not had broader ripple effects for now, but the decline in equity prices could dampen private consumption or investment over the medium term.

 

The World Bank also lowered its growth forecast for the South Asia region by 10 bps to 6.1% for FY26 and by 40 bps to 5.8% for FY25 owing to prospects of weakening global trade, rising global inflation, and tightening global financial conditions.  End

 

Reported by Pratiksha

Edited by Ashish Shirke

 

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