The World Bank announced on Tuesday an upgraded GDP forecast for India, raising it to 7% from an earlier projection of 6.6%, depicting an increase of 40 basis points.
This follows the International Monetary Fund’s (IMF) recent revision in July, where India’s GDP growth forecast for FY2024-25 was also increased by 20 basis points to 7%. The IMF had earlier estimated India’s growth at 6.8% in April but raised its expectations due to improved consumption, especially in rural regions.
At the same time, country’s economic growth did slow to 6.7% in the April-June quarter of 2024, marking a 15-month low. This slowdown is a stark contrast to the 8.2% growth recorded during the same period last year.
According to Reserve Bank of India (RBI) Governor Shaktikanta Das, this deceleration can largely be attributed to reduced government spending, a consequence of the model code of conduct enforced during the recent Lok Sabha elections.
Despite this temporary dip, the overall economic outlook remains positive, as indicated by the recent upward revisions from both the World Bank and IMF.
