The World Bank has increased the growth forecast for India to 7 per cent for the current financial year as the agriculture sector sees growth, spurring rural demand.
Despite challenging global trends and fears of recession, India continues to see robust growth, said the report released by the global financial institution on Tuesday.
In June, India was projected to grow at 6.6 per cent for FY24. World Bank senior economist Ran Li said the latest revision of India's GDP forecast is prompted by improved monsoon. This has partially offset the marginal moderation in the agriculture industry, thereby increased private consumption, especially in rural areas.
Earlier, the Reserve Bank of India set the country's GDP forecast for FY25 at 7.2 per cent.
World Bank expects private investment to slowly improve consumption. One of the main challenges for India is reducing unemployment.
However, the report pointed out that urban unemployment, which is currently at 17 per cent, is coming down as the number of women joining the workforce is on the rise.
It said the country's medium-term economic growth rate will remain strong at an average of 6.7 per cent over the next two fiscal years.
