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Informist, Tuesday, Jun. 10, 2025

 

--World Bank cuts India's FY26 GDP growth forecast by 40 bps to 6.3%

--World Bank cuts India's FY27 GDP growth forecast by 20 bps to 6.5%

--World Bank pegs India's FY28 GDP growth at 6.7%

 

MUMBAI – The World Bank Tuesday cut its forecast for India's GDP growth in 2025-26 (Apr-Mar) to 6.3%, from 6.7% forecast in January. India's GDP is estimated to have grown 6.5% in FY25, a four-year low.

 

India's growth forecast for FY27 has been cut by 20 basis points to 6.5%, before growth rises to 6.7% in 2028, according to the June edition of the World Bank group's Global Economic Prospects report. India's exports will be hit by rising trade barriers and weaker economic activity in key trading partners in FY26, before recovering in the next two financial years due to a pickup in services exports, it said in the report.

 

"Investment growth is expected to slow, primarily reflecting a surge in global policy uncertainty," the World Bank said. It still expects India to maintain the fastest growth rate among the world's large economies. 

 

India was a significant outlier in GDP growth in the South Asia region in 2024, where growth has generally firmed, the report said. Going ahead, economic activity in the entire region will be hit by rising trade barriers. Excluding India, efforts in poverty reduction, increase in per capita income, and job creation would continue to remain major challenges for the region's economies as GDP growth is seen slower than the pre-pandemic average.

 

The World Bank expects fiscal consolidation in India to continue, and decline in current expenditures along with growing tax revenues to contribute to a steady decline in debt-to-GDP ratio. Moreover, "in India, inflation will remain contained over the forecast horizon, assuming normal seasonal conditions," the report said.

 

In terms of trade balance, surplus in services sector can only partly offset the projected merchandise trade deficit, the World Bank said. It said the region as a whole has received robust remittances and large tourist revenues, thus contributing to a fall in external imbalances.  End

 

Reported by Aaryan Khanna and Sourabh Kumar

Edited by Ashish Shirke

 

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