India to remain fastest-growing large economy in FY26, FY27: World Bank
- IBEF
- January 17, 2025
The World Bank has maintained its growth forecast for India at 6.7% for FY26, underscoring the country’s position as the fastest-growing major economy for the next two years. The services sector is expected to expand steadily, while manufacturing activity will benefit from government initiatives to improve logistics infrastructure and implement tax reforms. Private consumption is anticipated to rise, driven by a stronger labour market, expanding credit, and declining inflation, though government consumption growth may remain constrained. Investment growth is projected to remain stable, supported by robust corporate balance sheets and easing financing conditions.
The global economy is forecasted to grow by 2.7% annually in 2025 and 2026, mirroring 2024, as inflation and interest rates gradually decline. Developing economies are predicted to hold steady at 4% growth, but face significant headwinds, including high debt, weak investment, and climate change costs, according to World Bank Chief Economist Mr. Indermit Gill. For South Asia, tight fiscal policies and shrinking fiscal deficits, particularly in India, are expected, driven by growing tax revenues. Risks to the region’s growth include higher commodity prices, protectionist trade policies, and climate-change-induced natural disasters, which could dampen industrial exports and economic expansion. Despite these challenges, India’s long-term prospects remain bolstered by reforms aimed at deepening trade ties and promoting efficient resource use.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
