India’s economy is poised to expand at a robust 7.3% in FY2025, according to the World Bank’s latest South Asia Economic Focus report, making it one of the fastest-growing major economies in the world.
The report attributes this strong performance to resilient domestic demand, steady investment flows, and a vibrant services sector, despite global uncertainties such as elevated oil prices and tightening financial conditions.
“India’s growth momentum remains impressive, supported by solid consumer spending, increased public investment, and a rebound in manufacturing,” said Augusto Lopez-Claros, World Bank’s Chief Economist for South Asia.
The World Bank also noted that India’s inflation rate is likely to stabilize around 4.5%, while fiscal consolidation and supply-side reforms will continue to support macroeconomic stability.
According to the report, India’s manufacturing and construction sectors are expected to post double-digit growth, buoyed by government-led infrastructure initiatives and the ongoing ‘Make in India’ campaign.
The services sector, led by IT, financial services, and logistics, continues to be a key driver of employment and exports, while rural consumption is showing gradual recovery after a series of monsoon fluctuations.
However, the World Bank cautioned that global headwinds — including geopolitical tensions, energy volatility, and climate-related disruptions — could weigh on growth if not managed through strong policy interventions.
India’s projected growth rate of 7.3% not only surpasses its South Asian neighbors but also significantly outpaces the global average of 2.8%, reinforcing its position as the world’s fastest-growing major economy.
