WB retains India’s FY26 growth at 6.3% amid global trade headwinds

The World Bank on Tuesday retained India’s economic growth forecast for FY2025-26 at 6.3%, even as escalating trade tensions and policy uncertainty weigh on global prospects. According to the latest Global Economic Prospects report, the multilateral lender warned that increasing protectionism and the risk of higher tariffs are becoming a “significant headwind” for nearly all economies.
India’s FY26 projection was already revised downward in April from the earlier estimate of 6.7% issued in January, largely due to anticipated global shocks. The World Bank’s latest update underscores that global GDP growth is now expected to slow to 2.3% in 2024, down from 2.7% projected earlier—its slowest pace outside global recessions since 2008. The Bank cautioned that without corrective action, the damage to global living standards could be “deep and long-lasting.”
India’s domestic economy showed resilience in the March quarter (Q4 FY25), expanding by 7.4%. However, this late surge failed to offset the broader moderation during the year, with overall GDP growth for FY2024-25 slowing to 6.5%—its weakest pace since the pandemic years. The Reserve Bank of India, in its latest monetary policy update last week, maintained its FY26 GDP forecast at 6.5%, citing caution over external shocks, including shifting global trade dynamics.

(Business Correspondent)