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World Bank lifts India growth outlook

hellohimachalse@gmail.com 07 Oct 2026 36 min ago

The World Bank on Tuesday raised India’s GDP growth forecast for the current fiscal to 7.1 per cent, up 0.5 percentage points from its projections in April, supported by robust domestic demand and strong exports, despite global headwinds.

India remains one of the fastest-growing major economies in the world and a key contributor to global growth, the multilateral organisation said in its latest India Development Update. “We have upgraded our FY27 growth forecast to 7.1 per cent from 6.6 per cent in April, as growth has held up better than expected despite trade and geopolitical uncertainties,” it said.

India’s growth accelerated to 7.8 per cent in FY26 from 7.2 per cent in FY25, driven by strong investment and solid private consumption, as favourable policy and credit environment outweighed trade tensions. The medium-term prospects are strong, the World Bank said, but also cautioned that external risks are elevated, including downside risks related to global oil prices, El Nino, and stock market corrections that would result in capital flow volatility. It noted that rural consumption initially outpaced urban demand supported by strong agricultural performance, while urban consumption strengthened later in the year following income-tax relief and GST cuts.

The momentum has carried into FY27, with GDP growing 7.8 per cent in Q1, above expectations, before moderating in subsequent quarters, it said. Private consumption is expected to remain the main driver of growth although a rainfall deficit through August is likely to weigh modestly on rural demand, while subdued government consumption will stay muted, it said.

The investment outlook is broadly unchanged, with heightened global uncertainty weighing on private investment as frontloading fades, partly offset by supportive financial and policy conditions, including stronger public investment, it said. India’s exports have performed better than expected and are likely to provide the main upside to the FY27 growth outlook relative to the April forecasts, it said.

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