The World Bank has predicted that India’s economy will grow by 6.7% in the next fiscal year, starting in April. This is a slight increase from the current fiscal year. The growth is expected to come from the strong performance of the services sector and a boost in manufacturing, thanks to government efforts to improve business conditions.
India continues to be the fastest-growing major economy in the world. For the current fiscal year, the World Bank forecasts a growth of 6.5%, down from 8.2% last year. However, India’s growth is still higher than other large economies. China is expected to grow by 4.5% this year and slow down to 4% next year. The United States, the world’s largest economy, grew by 2.8% last year, with a forecast of slower growth to 2.3% this year and 2% next year.
The World Bank report also warned about potential risks to the global economy, such as trade tensions and higher tariffs. While the report did not mention any specific leaders, it pointed out that these issues could impact India’s growth if global trade policies change.
Even though India’s growth has slowed down from last year, it is still expected to be one of the leaders in the global economy. The United Nations has similar growth predictions, estimating a 6.6% growth this year and 6.8% next year. The World Bank attributed the slowdown to weaker manufacturing and lower investment.
UN Projects India’s Economy to Grow 6.6%
According to the UN World Economic Situation and Prospects (WESP) 2025 report, India’s economy is expected to grow by 6.6% in 2025, after an estimated 6.9% growth in 2024. This growth will be largely fueled by private consumption, investment, and strong export performance in services and certain manufactured goods.
UBS Warns of Structural Slowdown in India
India’s $4 trillion economy is experiencing a structural slowdown, according to the investment research team at leading Swiss financial institution UBS. Unlike cyclical factors like fluctuating oil prices or reduced government spending, this slowdown is driven by deeper, long-term issues such as weakening credit growth, falling foreign investment, diminishing export competitiveness, and sluggish earnings growth.
This deceleration is expected to intensify due to the higher interest rates in the US. A senior emerging markets strategist at UBS stated, “India’s perceived protection from US economic risks is uncertain.” The country faces challenges because of its high debt service-to-revenue ratio, which could impact its growth as US Treasury yields remain high.
