World_Bank forecasts India's economic growth

The World Bank Group released its Global Economic Prospects report, projecting India to remain the world's fastest-growing major economy. Growth is forecast to moderate to 6.6% in fiscal year 2026-27 from 7.7% in the previous year, primarily due to higher energy prices and input costs affecting private demand. However, the economy is expected to rebound to 7.2% growth in fiscal 2027-28, driven by firming domestic demand and a pickup in export growth. The report highlights resilient domestic demand, particularly in rural areas, and recovering urban demand. Measures taken by India, such as reductions in fuel taxes and Goods and Services Tax rates, are expected to support consumer demand. External factors like reduced United States tariffs and planned free trade agreements are anticipated to mitigate the impact of weaker external demand. The conflict in the Middle East is identified as a key risk, affecting energy prices, supplies, remittances, and tourism, particularly for South Asia and other Emerging Markets and Developing Economies.