The World Bank has scaled up India’s growth forecast for the current fiscal and 2025-26. For both financial years, it has upwardly revised the projection by 20 basis points—from its earlier projection of 6.4 per cent made in January to 6.6 per cent for 2024-25 and from 6.5 per cent to 6.7 per cent for the next fiscal.

India will remain the fastest-growing large economy, the international financial institution said. Its latest Global Economic Prospects report has attributed the upward revision to strong public investment accompanied by private capital expenditure and rise in private consumption.

Growth in industrial activity, including manufacturing and construction, was stronger than expected, alongside resilient services activity, which helped offset a slowdown in agricultural production partly caused by monsoons, it said.

“India’s economy has been buoyed by strong domestic demand, with a surge in investment, and robust services activity. It is projected to grow an average of 6.7 per cent per fiscal year from 2024 through 2026--making South Asia the world’s fastest-growing region,” the World Bank report said.

Growth of domestic demand remained robust, with a surge in investment, including in infrastructure, offsetting a moderation of consumption growth as post-pandemic pent-up demand eased.

GDP per capita in emerging market and developing economies (EMDEs), which include India, is forecast to grow at about 3 per cent on average over 2024-26, well below the average in 2010-19. “Some large EMDEs, such as India, are expected to see continued solid per capita growth,” it said.

The World Bank’s forecast is in line with the ones made by the Reserve Bank of India and other expert bodies and individuals.

Activity in commodity importers excluding China has been robust. “This mostly reflects resilience in some large economies, notably India, owing to continued strength in domestic demand. Growth has been more muted in other commodity importers so far this year,” the World Bank report said.