'India projected to maintain fastest growth rate': World Bank holds FY26 growth at 6.3%; global growth rate forecast cut to 2.3%
India will remain the fastest-growing major economy in 2025–26 with a projected GDP expansion of 6.3%, the World Bank said in its latest Global Economic Prospects report, while warning that rising global trade barriers and weaker demand from key export partners are likely to dampen external sector momentum.
The projection for India remains unchanged from the World Bank's April estimate but marks a downward revision from the earlier January forecast of 6.7%. The multilateral lender cited subdued industrial growth and soft export demand as key reasons for the downgrade, though construction, services and rural consumption were seen holding steady, PTI reported.
'India is projected to maintain the fastest growth rate among the world's largest economies,' the World Bank stated, noting that even with the pressures on trade, the Indian economy's fundamentals remain relatively strong.
The global outlook, however, was more pessimistic. The World Bank cut its forecast for global GDP growth in 2025 to 2.3%, down from 2.7% in January. It described this as the weakest performance in 17 years outside of full-blown recessions, attributing the slowdown to policy uncertainty and fragmentation in trade relations—particularly amid heightened tariff actions by the US under President Donald Trump.
The Bank also said that average global growth in the first seven years of the 2020s could be the slowest since the 1960s if current conditions persist.
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Around 70% of global economies saw their forecasts revised down across all regions and income levels.
For India, the World Bank expects GDP growth to accelerate slightly to an average of 6.6% over FY27–28, aided by a rebound in exports, especially in services, and continued momentum in construction and consumption.
Last week, the Reserve Bank of India retained its GDP forecast for FY26 at 6.5%, citing macroeconomic resilience amid global headwinds.
World Bank analysts added that resolving current trade disputes—potentially by halving tariff levels—could raise global growth by 0.2 percentage points over 2025 and 2026. They advised developing economies to diversify trade and pursue broader liberalization to counter the fallout from protectionist measures.
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