AMN
India is set to maintain its status as the world’s fastest-growing major economy, with the World Bank projecting a growth rate of 6.3% for the financial year 2025–26. In its latest Global Economic Prospects report released Tuesday, the World Bank highlighted India’s economic resilience amid a slowing global backdrop.
Despite a moderation in growth during FY 2024–25—attributed mainly to a deceleration in industrial output—India’s economic momentum remains steady. Key sectors such as construction and services continued to perform well, while the agricultural sector showed signs of recovery after a challenging period marked by drought. Rural demand, in particular, was noted as a source of strength for the economy.
Looking ahead, the World Bank expects India’s growth to further pick up in FY 2026–27 and beyond, averaging 6.6% annually. This rebound will be supported by strong services sector performance and a gradual increase in exports.
Globally, the economic picture is far more subdued. The World Bank has warned that heightened trade tensions and policy uncertainty are dampening the world economy. It projects global growth to slow to 2.3% in 2025, making it the weakest pace since 2008 outside of official recessions. Nearly 70% of countries have seen growth forecasts downgraded, spanning all regions and income levels.
“If current forecasts hold, the first seven years of the 2020s will mark the slowest period of global growth since the 1960s,” the report noted. The developing world, excluding Asia, is facing a stagnation crisis, according to Indermit Gill, Chief Economist of the World Bank Group. He pointed out that growth in developing economies has declined steadily over the decades—from 6% in the 2000s to under 4% in the 2020s.
The report also flagged declining global trade and investment growth, alongside soaring debt levels. In response, it urged developing nations to strengthen their economic foundations by liberalising trade through regional and strategic partnerships and by focusing on revenue generation and targeted fiscal spending.
For India, staying on its growth path will likely depend on continued structural reforms, stable macroeconomic policies, and investments in infrastructure, human capital, and innovation.
