June 2025, New Delhi — The World Bank has lowered its previous projections for India’s GDP growth in FY 2025–2026 to 6.3%, pointing to slow private investment and muted exports as the main factors slowing the economy.
According to the World Bank’s most recent Global Economic Prospects report, India is still predicted to be the major economy with the fastest rate of growth in the world, notwithstanding the downward revision.
Important Points:
- Growth Prediction for FY26: Updated to 6.3%
- Reason: Muted private sector investments and lower-than-expected export performance
- Global Comparison: Among major economies, India continues to lead the world in growth.
- Interest rates and inflation are predicted to stay steady, providing some leeway for policymakers to encourage investment.
- Forecast: Spending on public infrastructure, a robust services sector, and domestic consumption will be the main drivers of growth.
Revised Forecast:
- Old forecast: Higher than 6.3%
- New forecast for FY26: 6.3%