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The Indian economy is projected to grow at 7.5 per cent in 2024, the World Bank has said, revising its earlier projections for the same period by 1.2 per cent.

The World Bank has raised India's economic growth forecast by 1.2 per cent to 7.5 per cent for 2023-24, on the back of robust activity in services and industry in its latest update for South Asia.

The increase in the projected growth rate for the Indian economy comes following the surprise 8.4 per cent surge in the country’s GDP during the Oct-Dec quarter. Finance Minister Nirmala Sitharaman has stated that the economy is on track to post an 8 per cent growth rate in the Jan-March quarter.

However, the World Bank expects the growth rate to moderate to 6.6 in 2025. The expected slowdown mainly reflects a deceleration in investment from its elevated pace in the previous year.

Over the medium term, fiscal deficit and government debt in India are projected to decline, supported by strong GDP growth and consolidation efforts by the Central government.

In its latest South Asia Development Update, released on April 2, the World Bank predicts a healthy growth for the region, which is primarily attributed to India's strong performance.

The report indicates that South Asia is poised to remain the world's fastest-growing region for the next two years, with a projected growth rate of 6.1 per cent in 2025.

Bangladesh is expected to see a rise in output by 5.7 per cent in 2024-25, while Pakistan's economy is projected to grow by 2.3 per cent and Sri Lanka's GDP growth is expected to increase by 2.5 per cent during this period.