World Bank downgrades India’s FY26 growth estimate

June 11, 2025 | 0 Comment

India’s growth engine is expected to lose some momentum, but it’s still leading the global pack. According to the World Bank’s June 2025 Global Economic Prospects report, India’s GDP growth forecast has been revised downward to 6.3% for FY 2025–26, amid global trade uncertainties and slowing investment. Yet, despite the dip, India remains one of the fastest-growing major economies in the world.

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India’s GDP growth  is expected to slow in the coming years, though it remains among the fastest globally, the World Bank reported in its June 2025 Global Economic Prospects (GEP).

In its latest forecast, the World Bank has trimmed India’s GDP growth projection for fiscal year (FY) 2025–26 to 6.3%, down from the 6.7% estimate released in January 2025. India’s GDP growth for FY 2026–27 is also anticipated to slow to 6.5%, a revision of 0.2 percentage points from earlier figures. Despite the downgrade, India is still seen as one of the world’s fastest-growing large economies, projected to outperform most peers .

Key factors underlying these revised estimates include weakening export demand driven by an uncertain global trade environment, along with a deceleration in both private investment and tax revenue collections. The report underscores broader global growth challenges, with major economies slashing forecasts in response to escalating geopolitical tensions and financial volatility. Globally, growth expectations have been scaled back to roughly 2.3% for 2025.

Nonetheless, India’s near-term economic resilience is bolstered by strong domestic consumption, stable infrastructure investment, and robust activity in manufacturing and services. Experts anticipate that this internal strength will help India continue leading major economies in growth, even as external risks persist.

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