India: World Bank Revises Upward Economic Growth Estimates for 2024-2025

The World Bank (WB), in its report on the current situation and prospects for economic and social development in South Asia, released on October 10, 2024, has revised upward the growth projections of almost all countries in the region except Bangladesh and Maldives.

In particular, World Bank analysts have revised growth estimates for India, the region’s largest economy, upward by 0.4%, which should lock in growth of 7% in fiscal year 2024-2025 (which began in April 2024). India’s economic development will be supported by increased consumption and agricultural production beyond the expectations of Indian and international economists. Economic growth will combat unemployment. In the next fiscal year 2025-2026, the Indian economy could slow down slightly to 6.7 percent growth.

Neighboring Pakistan, writes the World Bank report, is also continuing its recovery, which should translate into gross domestic product growth of 2.8%, or 0.5% more than the previous report’s estimates, in the Asian country’s 2024-2025 fiscal year, which began in July. Pakistan’s economy will have to grow by another 3.2 percent in the next fiscal year, 2025-2026.

For Nepal, forecasts for the fiscal year 2024-2025, which began in July, were also improved by 0.5%, rising to 5.1%. In the subsequent period 2025-2026, the economy will again grow by 5.5% due to the expected increase in international tourist arrivals, which will boost the hotel sector and overall strengthening of Nepal’s industry.

For Sri Lanka, which recently elected as president Anura Kumara Dissanayake, leader of the People’s Liberation Front (JVP), a communist and Marxist-Leninist party, growth rates are expected to be 4.4% (+2.2% from the previous estimate) in 2024 (not linked to the fiscal period) and 3.5% (+1%) the following year. The World Bank experts took into account the revitalization of industry and tourism, as well as the agreed restructuring of the country’s external debt and the economic and social reforms planned by the new president of Bangladesh.

Meanwhile, the economy of Bhutan, thanks to the country’s growing popularity among foreign tourists, is expected to show growth of 7.2 percent in the 2024-2025 fiscal year that began in July, or 1.5 percent more than previously estimated, and 6.6 percent thereafter in the 2025-2026 period.

In Bangladesh, following a major political crisis, mass popular protests, and Prime Minister Sheikh Hasina’s flight to India, the economic growth outlook for the 2024-2025 fiscal year that began in July was underestimated by 1.7%, falling to 4 percent. As the main reason for downward revision of Bangladesh’s assessments, the WB experts named “uncertainty related to the inflow of foreign direct investment in the country after popular protests and the consequences of recent catastrophic floods.” However, the World Bank believes in normalizing the political, economic, and social situation in Bangladesh and forecasts growth of 5.5 percent in 2025-2026.

Finally, for the Maldives, the estimate for 2024 remained unchanged at 4.7 percent, the same rate is expected for 2025, down half a percent from April, subject to the rescheduling of public debt repayment; in 2026, the rate is expected to slow to 4.6 percent.

The full text of the World Bank report can be downloaded on Pluralia’s website (PDF in English)