Daijiworld Media Network- New Delhi
New Delhi, Jun 11: In a development that underscores growing global economic uncertainty, the World Bank has trimmed India’s gross domestic product (GDP) growth projection for the financial year 2025-26 to 6.3 percent. This marks a reduction from the earlier forecast of 6.7 percent made in January this year.
The World Bank’s latest Global Economic Prospects report attributes the cut primarily to weaker-than-expected export performance and a slowdown in investment activity. The multilateral agency’s revised outlook comes amidst a broader downward trend in global economic expansion, with worldwide growth forecasted at just 2.3 percent in 2025 — the slowest pace in over a decade, excluding periods of outright recession.
Despite the revision, India continues to hold the title of the world’s fastest-growing major economy. The report expresses optimism about the medium-term prospects, suggesting that economic growth may rebound to 6.6 percent annually in FY2026-27 and FY2027-28. This improvement is expected to be driven by a revival in exports and sustained momentum in the services sector.
In a positive assessment of the macroeconomic fundamentals, the World Bank said that inflation in India is likely to remain under control, supported by normal seasonal trends. It also indicated that India’s fiscal health is on a path of gradual recovery, aided by increasing tax revenues and controlled government expenditure, which may help reduce the public debt-to-GDP ratio over time.
The report also featured comments from World Bank Group Chief Economist Indermit Gill, who called for developing nations to reconsider trade policies. Gill emphasized that reducing tariffs could stimulate growth and recommended countries take concrete steps towards rebuilding trade ties, restoring fiscal discipline, and generating employment.
India now faces the dual challenge of navigating a slower global economy while maintaining its domestic growth momentum. The latest projection places the spotlight on the country’s need to enhance export competitiveness and accelerate private investment to sustain its economic edge in the coming years.