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The World Bank has upgraded the economic growth forecast for India to 7 percent for the financial year 2024-2025, up from an initial projection of 6.6 percent. 

In its latest analysis, the World Bank noted that the Indian economy is maintaining its growth momentum, while the country's robust growth prospects, with declining inflation, will help reduce extreme poverty. 

India: The Fastest Growing Global Economy

The international financial institution added that India was the fastest-growing global economy in the financial year 2023-2024, with the country's gross domestic product expanding at a rate of 8.2 percent during the period. 

"India was the fastest growing economy in FY24 at 8.2 percent, and now it's growing at a good pace. Indian is economy growing at a good pace, building in past momentum," said Auguste Tano Kouame, the World Bank's Country Director for India. 

World Bank further pointed out that the Indian economy's growth was driven by public infrastructure investment and increased household real estate investments.

India's Medium-Term Outlook Positive

In its latest analysis, the World Bank added that India's medium-term outlook remains positive with strong economic growth predicted in the 2025-2026 and 2026-2027 financial years. 

"India needs to diversify its export basket and leverage global value chains to reach $1 trillion in merchandise exports by 2030," said Kouame. 

The World Bank official further noted that India's proactive stance on free trade agreements will play a crucial role in determining the country's growth in the future. 

"India can boost its growth further by harnessing its global trade potential. In addition to IT, business services, and pharma where it excels, India can diversify its export basket with increased exports in textiles, apparel, footwear, electronics, and green technology," added Kouame. 

However, the World Bank noted that economic growth globally is expected to remain muted compared to pre-pandemic levels.