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’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.
Last month, Asian Development Bank (ADB) and OECD and other global agencies like S&P and Fitch raised India’s FY27 GDP growth projection to around 7 per cent, boosted by robust June quarter economic activity and resilient domestic demand despite the Middle East conflict. ADB, while raising the growth forecast to 7 per cent, from 6.6 per cent estimated in July, said the Indian economy has benefited from lower-than-expected supply disruptions and sustained capital inflows, which helped cushion the impact of the conflict in Middle East.
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. The World Bank also said the services sector growth remained elevated despite a slowdown from the high base in FY26.
