World Bank Ups India’s Growth Forecast to 7% for FY25

The World Bank has revised its growth forecast for the Indian economy, increasing it to 7% for the fiscal year 2024-25, up from the earlier estimate of 6.6%. This adjustment comes despite a slowdown to 6.7% in the April-June quarter, attributed to reduced government spending during national elections.

Key Drivers

Agricultural Recovery & Rural Demand: The upward revision is largely driven by a recovery in the agricultural sector and an increase in rural demand.

Government Spending on Infrastructure: Increased investment in infrastructure by the government has also bolstered growth prospects.

Challenges & Outlook

Unemployment: Despite the positive outlook, the World Bank highlights the challenge of job creation, noting that the urban unemployment rate remains high at an average of 17%.

Medium-Term Growth: The World Bank projects that India’s medium-term economic growth will average 6.7% over the next two fiscal years, with a gradual increase in private investment expected to aid in consumption recovery.

World Bank: Key Points

Established: 1944

Headquarters: Washington, D.C., USA

Members: 189 countries

Primary Aim: To reduce poverty and support development by providing financial and technical assistance to developing countries.

Key Institutions

International Bank for Reconstruction and Development (IBRD): Provides loans to middle-income and creditworthy low-income countries.

International Development Association (IDA): Offers concessional loans and grants to the world’s poorest countries.

Focus Areas: Infrastructure, education, health, agriculture, environmental sustainability, and private sector development.

Leadership: President, typically a U.S. national; current president as of 2024 is Ajay Banga.

Major Programs: Provides funding for projects, policy advice, and technical expertise to help countries achieve sustainable development.

Piyush Shukla

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