World Bank Raises India Growth Forecast to 6.6%

The World Bank has raised its growth forecast for India's economy in fiscal year 2026-27 to 6.6 percent, up from a previous estimate of 6.3 percent, citing robust domestic demand and export performance amid global uncertainties stemming from the Middle East conflict.

The revision, detailed in the bank's latest South Asia Economic Update released on Wednesday, projects India's gross domestic product to expand by 7.6 percent in fiscal year 2025-26, accelerating from 7.1 percent in the fiscal year that ended March 31, 2026. Private consumption has driven much of this momentum, bolstered by low inflation and recent rationalization of goods and services tax rates, which are expected to support household spending in the early months of the next fiscal year.

However, the outlook for 2026-27 incorporates headwinds from the ongoing Middle East tensions. The conflict escalated on February 28 when the United States and Israel launched military strikes against Iran, prompting retaliation from Tehran. A two-week ceasefire involving Iran, the United States, and Israel was agreed upon on April 8, but doubts persist over its durability, particularly regarding energy flows through the Strait of...