United Nations, Jan 17 (IANS): The World Bank projects India’s economy to grow by 6.7 per cent in the next fiscal year starting in April, slightly higher than in the current fiscal year, and continuing to top the growth tally.

The Word Bank’s Global Economic Prospects released on Thursday estimated the current fiscal year’s growth rate at 6.5 per cent, down from the 8.2 per cent in the previous period.

But it said that “the services sector is expected to enjoy sustained expansion, and manufacturing activity will strengthen, supported by government initiatives to improve the business environment”, buoying the growth projections of 6.7 per cent for the next two fiscal years.

With global gross domestic product growth rate stuck at 2.7 per cent since 2023 and into the projections till 2026 according to the Bank, India is the world’s fastest growing large economy.

China follows it with a projected growth of 4.5 per cent this calendar year, and slowing down to 4 per cent next year.

The world’s largest economy, the US, was estimated to have grown by 2.8 last year with the projected growth slowing down to 2.3 per cent this year and 2 per cent next year.

The report warned about the risks to the world economy from trade tensions and tariff hikes without naming the US President-elect Donald Trump, who has threatened to upend world trade.

“Adverse trade policy shifts in major economies” could pose a risk for India, the report said.

The World Bank projections for India’s GDP growth hew closely to the United Nations projections released last week -- 6.6 per cent for this calendar year and 6.8 per cent for next year.

The World Bank attributed the drop in India’s growth rate from 8.2 per cent in 2023-24 to 6.5 per cent in the current fiscal year to "a slowdown in investment and weak manufacturing growth”.