World Bank Cuts India's FY26 GDP Growth Forecast To 6.3%

The World Bank cut its forecast for India's gross-domestic-product growth in the current financial year by 40 basis points to 6.3%, according to the Global Economic Prospects for June 2025. The cut was compared to its forecast in January this year.

Growth in India moderated, reflecting a slowdown in investment on the demand side and a deceleration in industrial output growth on the supply side in FY25.

In FY26, growth is expected to take a hit from exports, dampened by weaker activity in key trading partners and rising global barriers. Still, India is projected to maintain the fastest growth rate among the world's largest economies at 6.3%, it added.

Growth expected to recover to 6.6% in FY27 and FY28 on an average, partly supported by robust services activity that contributes to a pickup in exports.

Fiscal consolidation is also set to continue with growing tax revenues and declining current expenditures projected to contribute to a gradual decline in public debt to GDP ratio, the World Bank said.

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