World Bank raised India’s GDP growth forecast by 0.5%: to 7% for FY 2024-25, RBI had estimated it to be 7.2%

The World Bank has raised the estimate of India’s Gross Domestic Product (GDP) growth for the financial year 2024-25 from 6.6% to 7%. World Bank Country Director (India) Auguste Tano Koume said that in the last financial year 2024, the Indian economy grew at a rate of 8.2%, which was the fastest.

It is still growing at a good pace. In such a situation, the World Bank has increased its growth forecast for the current financial year.

RBI maintained GDP growth forecast at 7.2%
Last month, RBI maintained India’s GDP growth forecast for FY25 at 7.2%. At the same time, the International Monetary Fund (IMF) raised India’s GDP growth forecast for the financial year 2024-25 by 0.20% to 7%.

What is Gross Domestic Product?
GDP is one of the most common indicators used to track the health of the economy. GDP shows the value of all goods and services produced within a country in a given period of time. It also includes the production done by foreign companies within the country’s borders.

There are two types of GDP
There are two types of GDP. Real and nominal. In real GDP, the value of goods and services is calculated on the base year’s value or stable price. Currently, the base year for GDP calculation is 2011-12. That is, the calculation is done according to the rates of goods and services in 2011-12. Whereas nominal GDP is calculated on current prices.

How is GDP calculated?
A formula is used to calculate GDP. GDP=C+G+I+NX, where C stands for private consumption, G stands for government spending, I stands for investment and NX stands for net exports.

Who is responsible for the increase or decrease in GDP?
There are four important engines to increase or decrease GDP. First is you and me. Whatever you spend contributes to our economy. Second is the business growth of the private sector. It contributes 32% to GDP. Third is government expenditure.

This means how much the government is spending on producing goods and services. It contributes 11% to GDP. And the fourth is net demand. For this, India’s total exports are subtracted from total imports, because in India imports are more than exports, so its impact on GDP is negative.