World Bank Retains India’s FY26 GDP Growth Forecast at 6.3% Despite Global Slowdown
Global Projections Cut Amid Rising Trade Tensions, but India Holds Steady as Bright Spot
New Delhi, June 11, 2025 — The World Bank has reaffirmed India’s GDP growth forecast at 6.3% for FY26, reinforcing the country’s status as the world’s fastest-growing major economy. This comes even as the global economic landscape weakens, with growth projections lowered for nearly 70% of countries amid escalating trade tensions and widespread policy uncertainty.
India’s Growth Resilience Amid Global Headwinds
The retained forecast follows a downward revision of 40 basis points in April. Despite global turbulence, India continues to chart a stable growth path, thanks to:
- Strong domestic services activity
- Recovery in exports (expected in FY27 onward)
- Fiscal discipline and infrastructure investment
The World Bank projects GDP growth to climb to 6.5% in FY27 and 6.7% in FY28, supported by structural reforms and robust private consumption.
“India remains a global growth engine at a time when most economies are slowing,” said a World Bank economist. “The country’s diversified economy and domestic demand strength provide insulation against global shocks.”
🌍 Global Growth Faces Sharp Deceleration
In stark contrast, global economic momentum is faltering. The World Bank now forecasts:
- 2.3% global GDP growth in 2025, the weakest pace since the 2008 financial crisis, excluding pandemic years.
- 2.4% in 2026, and 2.6% in 2027, down from the earlier projection of 2.7%.
“The developing world outside Asia is facing a prolonged stagnation,” said Chief Economist Indermit Gill, warning that these regions risk becoming “development-free zones.”
Punch
🔥 Trade Wars and Policy Paralysis
The slowdown is fueled by geopolitical uncertainty, particularly the US-China trade standoff, with President Donald Trump’s reciprocal tariffs disrupting global supply chains. The tariffs, imposed in April 2025 and temporarily suspended for 90 days, continue to cast a shadow over global trade.
India, while relatively insulated, has seen its export growth weaken, particularly in manufacturing and IT services. Rising global trade barriers are also discouraging foreign investment inflows.
✅ Key Highlights at a Glance:
- India FY26 GDP Growth: 6.3% (unchanged)
- FY27 Growth: 6.5%; FY28: 6.7%
- Global GDP Growth 2025: 2.3% (down from 2.6%)
- Main risks: Trade wars, policy uncertainty, investment slowdown
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