New Delhi, October 6 (Daily Kiran) : The World Bank has expressed confidence in India’s economic resilience by raising its growth forecast for the fiscal year 2026-27. In its latest South Asia Economic Update report, the bank revised India’s GDP growth estimate from 6.6% to 7.1%.
According to the World Bank, India’s economy is bolstered by strong domestic demand, expanding industrial activities, and ongoing strength in the services sector. The report highlights that despite global uncertainties, India’s growth momentum remains robust.
The long-term growth potential of India has been enhanced by several significant structural reforms implemented in recent years. These reforms include the integration of labor codes, Goods and Services Tax (GST) improvements, tariff rationalization, the Insolvency and Bankruptcy Code (IBC), and substantial investments in both physical and digital infrastructure.
Despite facing some challenges in the agricultural sector, the overall strength of the economy is expected to help India maintain a strong growth rate in the current fiscal year. Domestic demand continues to be the primary driver of economic activities, representing the greatest strength of India’s economy.
However, the World Bank has also pointed out some risks. The report notes that high energy prices and adverse weather effects associated with El Niño could pose challenges to economic growth and inflation management in the coming months.
Looking at the South Asian landscape, the World Bank has also raised its growth forecast for the region in 2026 to 6.9%, up from a previous estimate of 6.3%. This improvement is primarily attributed to India’s better-than-expected economic performance.
Interestingly, the growth forecast for countries in South Asia, excluding India, has been revised down from 4.1% to 3.6%. This adjustment is largely due to a significant reduction in the growth estimate for Bangladesh.
The report emphasizes that South Asia faces several global challenges. As a major importer of crude oil, the region is directly affected by high energy prices, which impact inflation and economic activities. Additionally, the pressure on the agricultural sector may increase due to El Niño, which is a primary source of livelihood for a large portion of South Asia’s population.
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