FX.co ★ World Bank Raises India’s FY2025/26 Growth Forecast to 6.5%

The World Bank announced on Tuesday an upward revision of its economic growth forecast for India for fiscal year 2025/26, raising it to 6.5% from an earlier estimate of 6.3% in June. Conversely, the World Bank adjusted its forecast for fiscal year 2026/27 downward by 0.2 percentage points to 6.3%, attributing this revision to the unexpected higher tariffs imposed by the United States. The agency noted that India, bolstered by sustained consumption growth, is expected to continue as the fastest-growing major economy globally. Favorable domestic conditions, notably in agriculture output and rural wage growth, have surpassed initial expectations. This analysis is detailed in the World Bank's South Asia Development Update released in October 2025. In recent reports, the Indian government suggested that GDP growth for FY 2025/26 could exceed the projected range of 6.3% to 6.8%, driven by an increase in consumption following recent reductions in goods and services tax (GST) tariffs and solid Q1 GDP figures. Most recently, data revealed that India's GDP expanded by 7.8% in the June quarter, achieving the highest growth rate in five quarters.