World Bank Also Lowers India’s Growth Forecast Amid Global Uncertainty
The World Bank, citing global economic uncertainty and policy instability, has lowered India’s GDP growth projection for the fiscal year 2025–26 by 0.4 percentage points, revising it down from 6.7% to 6.3%.
In its South Asia Economic Focus report, the World Bank highlighted challenges including weak private investment, reduced public capital expenditure, and sluggish progress in meeting fiscal targets. It also pointed to regional headwinds impacting economic growth across developing Asia.
Key Highlights:
- India’s growth for FY 2025–26 revised down from 6.7% to 6.3%
- The growth forecast for FY 2024–25 remains at 6.5%
- Concerns raised over private investment being affected by policy unpredictability
The report stated that despite tax cuts potentially benefiting private consumption, inconsistent policy changes could hinder long-term private sector confidence and investment.
Uncertainty Could Impact Investment
The World Bank expressed concerns that though India may benefit from tax reforms, global and regional factors—alongside domestic policy unpredictability—might limit gains from private investment and consumption.
The report adds that while government spending could drive near-term growth, sustained expansion will depend on consistent and supportive economic policy. Demand recovery is expected, but long-term gains will require policy clarity and macroeconomic stability.
