The World Bank predicts that India will achieve a 7.6% GDP growth rate in the financial year 2025-26. Additionally, the country’s growth forecast for 2026-27 has been raised to 6.6% from the previous 6.3%. The World Bank Group attributes this positive outlook to India’s strong performance, supported by robust domestic demand and recent trade agreements.
The report anticipates a slowdown in South Asia’s growth to 6.3% in 2026, down from 7% in 2025, due to disruptions in global energy markets. Despite this, the South Asia Economic Update projects growth to rebound to 6.9% in 2027. South Asia continues to outpace other emerging-market and developing economies, but faces uncertainties due to factors like the conflict in the Middle East and global energy market disruptions.
The World Bank emphasizes the need for policy reforms in South Asia to sustain growth, create jobs, and enhance resilience to shocks. It suggests implementing measures to improve public infrastructure, remove trade barriers, foster business environments, and attract private capital. The report also highlights the importance of job creation for the region’s expanding workforce.
The report delves into industrial policy in South Asia, noting that governments in the region are increasingly using such policies to shape economic activities. While industrial policies have shown mixed results, the report recommends carefully designed policy measures in sectors like urban development, tourism, and digital services. It underscores the importance of broad-based reforms and specific market interventions to address challenges and foster growth.
