World Bank retains India’s FY26 growth at 6.3%

World Bank on Tuesday pegged India's economic growth projection at a lower level of 6.3 per cent for 2025-26 due to pressure on exports, emanating from global uncertainties, though the country will remain the fastest growing major global economy.

In April, World Bank had lowered India's growth projection for 2025-26 from its January forecast of 6.7 per cent to 6.3 per cent.

According to the World Bank's latest Global Economic Prospects report, heightened trade tensions and policy uncertainty are expected to drive global growth down this year to its slowest pace since 2008 outside of outright global recessions.

Regarding India, the report said the growth moderated in FY2024-25 (April 2024 to March 2025), partly reflected a deceleration in industrial output growth. However, growth in construction and services activity remained steady and agricultural output recovered from severe drought conditions, supported by resilient demand in rural areas.

"India is projected to maintain the fastest growth rate among the world's largest economies, at 6.3 per cent in FY2025-26," it said.

Meanwhile, the global growth has been projected to slow to 2.3 per cent in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year.

The turmoil has resulted in growth forecasts being cut in nearly 70 per cent of all economies — across all regions and income groups, it said.

The bank said after unexpectedly weak growth of 6 per cent in 2024, activity in South Asia (SAR) was decelerating amid rising global trade barriers, heightened policy uncertainty and financial market volatility.

World Bank expects China to grow at 4.5 per cent in 2025 and 4 per cent next year.

Last week, the Reserve Bank on India retained GDP growth projections for the current fiscal at 6.5 per cent, saying the Indian economy presents a picture of strength, stability and opportunity in the backdrop of global uncertainty.