World Bank Lowers India’s FY27 Growth Forecast to 6.3%, citing moderating investment momentum and persistent global headwinds. The multilateral lender also underscored the urgency of structural reforms to sustain long-term growth.
Despite the downgrade, India remains one of the fastest-growing major economies, with the Bank expecting 6.5% growth in FY26, supported by robust domestic demand and improving rural consumption.
According to the World Bank’s latest economic outlook, India’s growth prospects could face challenges from slowing exports, high borrowing costs, and weak private investment. The report also noted that the impact of recent global trade tensions and tariff actions may weigh on external demand.
However, the World Bank maintained that India’s strong macroeconomic fundamentals — including healthy fiscal management, a stable banking sector, and moderate inflation — provide resilience amid external shocks.
The institution emphasised that the next phase of growth will depend on the government’s ability to accelerate reforms in areas such as labour laws, land acquisition, and trade liberalisation. These measures, it said, are critical to attract private investment, enhance productivity, and sustain momentum beyond short-term consumption-led expansion.
While India’s growth trajectory remains solid compared to global peers, the World Bank’s message is clear: policy urgency, not complacency, will determine how far the economy can rise above cyclical pressures in the coming years.
