World Bank Raises India’s FY25 GDP Forecast To 7% From 6.6%

India's economy grew uh at a very fast uh rate last uh fiscal year or last Financial year at 88.2% and uh uh this momentum we think will continue in the coming year and we saw that basically with the uh q1 uh numbers that just came out uh and it's uh we we had initially uh estimated or forecast next years growth at 6.6% but the dynamism in the economy suggest that we think India can grow at a faster rate of 7% uh there are two main uh factors for that uh increase in the forecast one is agriculture is doing better we think it will continue doing better and two global trade uh is picking up at a faster rate than we had initially invest and India will benefit from uh this uh this uh Improvement in global trade uh but broadly speaking uh India is growing very fast uh and India is still the fastest growing l economy in the world and has been for the past uh few years the reason why India is doing so well is um we we think broadly the policy environment is is good uh uh the public sector uh investment is driving overall investment and and hopefully will crowd in private investment very soon and we seeing sign of that already private investment is picking up already you know in the last quarter uh we think that uh uh on the manufacturing side uh and and you know India is you know now improving its its its performance and that will continue uh driving growth and services have done very well and will continue doing well agriculture is a bit more volatile the good years and not to Good Year years but overall again it's a sector that pull its weight as well so overall the economy is doing well uh thanks to good policy environment and thanks to investment from the public side driving investment on the private side so will this projected growth will help uh how it will help to India to achieve its aim of 5 trillion economy well India's economy is going to become 5 trillion soon at this rate of growth uh you know the size of the economy will double uh in less than 10 years so you know in less than 10 years the economy will be close to 8 Bill 8 trillion you know um um to 5 trillion is it will be surpassed quite soon the question is uh is um when uh you know uh India will become uh a a high income country this will also happen uh but for that to happen growth will have to be maintained at a very fast clip of close to 8% so what corrective measure does World Bank would like to suggest to India to maintain this growth growth rate well let's so in the IDU this this in this IDU we talk a lot about trade so let me focus on how trade can contribut to this fast growth uh you know trade is an important contributor to growth in general uh through export uh by expanding the export Market uh and be able to being able to produce a lot more good and services so that you can sell to a larger market through import trade contribut to growth also because trade allows um uh domestic producers to have access to technology by importing intermediate Goods uh it allows them to have access to uh Innovation channels to connect to Global value chains that have Innovation embedded in them uh it also allows consumers to have access to a large set of goods that they can goods and services that they can import to improve their own productivity as workers the the the efficiency as household um and then trade also is good because it forces domestic producers to be confronted to uh competition and that makes them be more Innovative it makes them be more uh productive more competitive and therefore country it it allows uh total Factor productivity to increase faster um so for India um to tap into the trade potential for powering growth in the future we think there are three things that uh India could could do one is uh to continue reducing trade cost trade cost have come down uh in India thanks to Improvement in in logistics and thanks to the use of Technology but the these trade cost are still high and they could come down uh faster uh the second area of intervention could be uh to reduce trade barriers trade barriers have gone up everywhere in the world you know our data show that there's some countries that have introduced uh a lot of uh trade barriers uh even more than than India uh so for India uh if India could reduce its trade barriers both tariff and non-tariff barriers it could be it would be good for for for both export and import and the third area is to uh speed up trade integration with other countries uh so India can export more to to more countries and and and import more from more countries too uh and and we think if India could work on these three areas uh we think trade will really become a very very important source of growth uh and not just growth but also jobs creation because India will then be able to export to countries that will import Goods that require a lot of uh um labor input uh for for for their production uh so trade will become more job creating and therefore it will make growth a lot more inclusive [Music]