India Set to Lead Global Growth Again in FY27 at 6.6%, Says World Bank
Domestic demand and export prospects expected to keep the economy ahead of other major nations, with growth seen rebounding in FY28.
NEW DELHI, June 11: India is projected to remain the world’s fastest-growing major economy in fiscal year 2026-27, even as economic expansion is expected to ease to 6.6 per cent from 7.7 per cent a year earlier, according to the World Bank’s latest Global Economic Prospects report.
The multilateral lender attributed the expected slowdown to softer private demand amid rising energy prices and higher input costs. However, it noted that policy measures, including reductions in Goods and Services Tax (GST) rates, are likely to provide support to household spending.
The report forecasts a recovery in economic momentum thereafter, with growth estimated at 7.2 per cent in fiscal year 2027-28, driven by strengthening domestic demand and improving export performance.
Despite uncertainty stemming from geopolitical tensions, economic activity in India has remained resilient this year. The World Bank highlighted strong rural consumption, a gradual revival in urban demand and steady growth in tax collections linked to domestic sales.
To cushion the impact of elevated energy costs and shortages of key agricultural inputs such as fertilisers, authorities have introduced several measures, including cuts in fuel taxes aimed at easing inflationary pressures.
The report also pointed to favourable trade developments, stating that lower US tariffs and the anticipated implementation of free trade agreements could help offset weaker global demand and support merchandise exports.
According to the World Bank, these factors are expected to strengthen economic activity over the next two fiscal years and reinforce India’s position as a key driver of global growth.
Across the broader South Asia region, growth is projected to slow to 6.3 per cent in 2026, largely due to the economic fallout of conflict in West Asia. Higher energy prices, disruptions in oil and gas supplies, and pressures on remittances and tourism are expected to weigh on regional performance.
The report further noted that many emerging and developing economies are facing weaker per capita income growth, raising concerns about a prolonged slowdown in income convergence with advanced economies.
