{"id":42270,"date":"2025-10-27T12:16:16","date_gmt":"2025-10-27T06:46:16","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=42270"},"modified":"2025-10-30T15:36:33","modified_gmt":"2025-10-30T10:06:33","slug":"world-bank-revises-indias-gdp-growth-estimate","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/world-bank-revises-indias-gdp-growth-estimate\/","title":{"rendered":"World Bank Revises India\u2019s GDP Growth Estimate"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>Highlights of the WB\u2019s Forecast on the Indian Economy<\/li>\n<li>Opportunities and Challenges for the Indian Economy<\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<p>The World Bank (WB) revised its forecast for India&#8217;s GDP growth to 7% for FY25 from 6.6% previously, citing increases in household real estate investments and investments in infrastructure.<\/p>\n<h2><strong>Highlights of the WB\u2019s Forecast on the Indian Economy:<\/strong><\/h2>\n<ul>\n<li><strong>GDP growth:<\/strong> India was the fastest-growing major economy at 8.2% last fiscal and is expected to grow at 7% this fiscal year and 6.7% in FY26.<\/li>\n<li><strong>Industrial growth:<\/strong> It is expected to slow to 7.3% in FY26 compared to 7.6% in FY25. Industrial growth has recovered to 9.5% in FY24 after Covid-19 related disruptions.<\/li>\n<li><strong>Gross Fixed Capital Formation (GFCF):<\/strong> GFCF is expected to slow to 7.8% in FY25 compared to 9.0% in FY24. The GFCF growth rate stood at 6.6% in FY23.<\/li>\n<li><strong>Service sector growth: <\/strong>Amid a globally weakening IT investment climate, the service sector growth is also expected to slip to 7.4% in FY25 and to 7.1 per cent in FY26, compared to 7.6 per cent in FY24.<\/li>\n<li><strong>Agricultural growth:<\/strong> It is expected to register a sharp jump to 4.1% in FY25, compared to 1.4% in FY24.<\/li>\n<li><strong>Export-Import: <\/strong>The World Bank predicted 7.2% growth in the exports of goods and services during FY25 compared to FY24. The growth of imports is expected to be 4.1% in FY25 compared to 10.9% in FY24.<\/li>\n<\/ul>\n<h2><strong>Opportunities and Challenges for the Indian Economy:<\/strong><\/h2>\n<ul>\n<li><strong>Export sector:<\/strong>\n<ul>\n<li><strong>India can expand its export portfolio<\/strong> by increasing its exports of electronics, green technology items, textiles, garments, and footwear in addition to its strengths in IT, business services, and pharmaceuticals.<\/li>\n<li>However, India has been <strong>losing ground to rivals in the labour-intensive<\/strong> apparel and footwear sectors.<\/li>\n<li>India\u2019s share in global apparel exports fell from 4% in 2018 to 3% in 2022 due to increased production costs and decreasing productivity.<\/li>\n<li>Meanwhile, countries like <strong>Bangladesh, Vietnam, Poland, Germany, and France <\/strong>have managed to increase their global export share in major job-creating sectors by up to 2% between 2015 to 2022.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Trade barriers:<\/strong>\n<ul>\n<li>The global trade landscape has witnessed <strong>increased protectionism<\/strong> in recent years. The post-pandemic reconfiguration of global value chains has created opportunities for India.<\/li>\n<li><strong>India has boosted its competitiveness <\/strong>through the National Logistics Policy (<strong>NLP<\/strong>) and digital initiatives that are reducing trade costs.<\/li>\n<li>However, tariff and non-tariff barriers have increased and could limit the potential for trade-focused investments.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Current account deficit (CAD):<\/strong>\n<ul>\n<li>The CAD stood at 0.7% in FY24 compared to 2% in FY23.<\/li>\n<li><strong>Foreign exchange reserves<\/strong> reached an all-time high of $670.1 billion (in August 2023), equivalent to 11 months&#8217; worth of spending, thanks to a falling CAD and robust inflows from foreign portfolio investments.<\/li>\n<li>However, the WB predicted a steady widening of the CAD from 1.1% in FY25 to 1.2% in FY26 and 1.6% in FY27.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Jobs in India:<\/strong>\n<ul>\n<li>While India is the fastest-growing major economy, <strong>urban youth unemployment remains high at 17%.<\/strong><\/li>\n<li>Jobs in India generated directly and indirectly connected to international trade have declined over the last decade.<\/li>\n<li>The country has missed out on the export opportunity presented by China\u2019s withdrawal from labour-intensive manufacturing sectors.<\/li>\n<li>To create more trade-related jobs, <strong>India can integrate more deeply into global value chains<\/strong>, which will also create opportunities for innovation and productivity growth.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q.1. What is the National Logistics Policy (NLP)?<\/strong><\/h3>\n<p>India&#8217;s NLP is a transformative initiative launched by the government (in 2022) to increase efficiency across the logistics and supply chain sector. It aims to decrease the overall logistics cost from an estimated 13-14% of the GDP to a competitive 8%, aligning India with global standards.<\/p>\n<h3><strong>Q.2. Why is the growth of labour-intensive sectors important for India?<\/strong><\/h3>\n<p>According to the International Labour Organization (ILO), there is \u201cno alternative\u201d for India to have growth led by labour-intensive manufacturing at least for the next 10 years to absorb seven-eight million youths who will join the labour force annually.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/world-bank-forecasts-indias-gdp-growth-at-7-for-fy25\/articleshowprint\/113043798.cms?val=3728\" target=\"_blank\" rel=\"nofollow noopener\">World Bank pegs India\u2019s growth at 7% in FY25<\/a> | <a href=\"https:\/\/indianexpress.com\/article\/business\/world-bank-projects-india-grow-7-per-cent-fy25-9547718\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/indianexpress.com\/article\/business\/india-export-jobs-decline-china-opportunity-world-bank-9548181\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The WB revised its forecast for India&#8217;s GDP growth to 7% for FY25 from 6.6% previously, citing increases in household real estate investments and investments in infrastructure.<\/p>\n","protected":false},"author":5,"featured_media":42271,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-42270","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/42270","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=42270"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/42270\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/42271"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=42270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=42270"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=42270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}