The World Bank has increased India’s gross domestic product (GDP) growth forecast for the current financial year to 7.2 percent in view of strong domestic demand and the impact of tax reforms. This is 0.9 percent more than the estimate made in June. The World Bank gave this information in its major report ‘Global Economic Prospects’.
The pace of GDP growth will increase!
According to the report, India’s economic growth rate may decline to 6.5 percent in the year 2026-27. This estimate is based on the assumption that the 50 percent duty imposed by the US on imports from India will remain in effect during that period also. Despite this, the World Bank says that India will remain the fastest growing economy among the major economies of the world.
The World Bank said that despite higher duties on some exports to America, there has been no negative change in the growth forecast compared to June. The main reason for this is that the adverse impact of tariffs has been compensated by strong domestic demand and increase in exports to other markets. America’s share in India’s total merchandise exports is about 12 percent.
domestic demand strengthened
The report further said that India’s economic growth rate is expected to increase to 6.6 percent in the financial year 2027-28, which will be supported by strong service sector activities, improvement in exports and investment pick-up.
Regarding the current financial year 2025-26, the World Bank said that India’s growth rate is estimated to be 7.2 percent, because domestic demand remains strong. According to the report, this reflects strong private consumption, which has been supported by past tax reforms and improvement in real incomes of households in rural areas. It is noteworthy that the World Bank had estimated India’s economic growth rate to be 6.3 percent in June, which has now been revised and increased.
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