GDP Growth
World Bank raises India FY26 GDP growth forecast but lowers FY27 projection
This story was originally published at 12:26 IST on 7 October 2025
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NEW DELHI – The World Bank has raised its forecast for India's GDP growth in the current financial year by 20 basis points to 6.5%, it said Tuesday. For FY27, the World Bank has lowered the growth forecast to 6.3% from 6.5%.
"India is expected to remain the world's fastest-growing major economy, underpinned by continued strength in consumption growth," the World Bank said in the South Asia Development Update report for October. "The government's reforms to the Goods and Services Tax (GST) – reducing the number of tax brackets and simplifying compliance – are expected to support activity."
The World Bank follows the Reserve Bank of India in raising the growth projection for the current financial year, after GDP grew quicker than expectations at 7.8% in the June quarter. The RBI last week raised its GDP growth forecast for FY26 to 6.8% from 6.5%.
"Growth was supported by strong private consumption and investment and boosted by lower-than-expected prices," the World Bank said. "Investment growth remains robust, supported by public infrastructure projects, strong credit growth, and loosening monetary policy."
The multilateral development bank downgraded the growth forecast for FY27, citing the imposition of 50% tariff on three-quarters of India's goods exports to the US. The 50% tariff on India is one of the highest in the world, even as New Delhi and Washington are working on a bilateral trade agreement. Almost a fifth of India's goods exports went to the US in 2024, equivalent to about 2% of GDP, according to the report.
The World Bank raised the growth forecast for South Asia by 50 bps to 6.6% for 2025. For 2026, it lowered the growth forecast for the region by 60 bps to 5.8%. End
Reported by Shubham Rana
Edited by Avishek Dutta
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