India’s Growth Forecast Cut to 6.3% by World Bank, But Country Remains Fastest Growing Major Economy

New Delhi: The World Bank has revised India’s growth outlook downward to 6.3% for the financial year 2025-26, down from its January projection of 6.7%. This 0.4 percentage point cut comes amid weakening export performance, sluggish investment activity, and increasing global economic uncertainty. Despite the downgrade, the World Bank stated that India would continue to be the fastest-growing economy among major global players.

The June 2025 update of the Global Economic Prospects report, released in Washington on June 10, notes that the Indian economy is facing the effects of a slowdown in industrial production. However, the steady performance of the services sector and a recovery in agricultural output have provided some cushion. The revised growth estimate also falls short of the Reserve Bank of India’s forecast of 6.5% growth for the same period, which was announced during its latest monetary policy review on June 6.

According to the World Bank, the revised projection is attributed to weakened global trade dynamics and policy-related uncertainty. “India is projected to maintain the fastest growth rate among the world’s largest economies, at 6.3% in FY 2025-26,” the report said. “Nevertheless, the forecast has been downgraded… with exports dampened by weaker activity in key trading partners and rising global trade barriers.” The report further highlighted that investment growth is likely to be moderate as businesses remain cautious in the face of global instability.

Looking ahead, the World Bank expects the Indian economy to bounce back, projecting an average growth of 6.6% during the years 2026-27 and 2027-28. The boost is expected to come from a stronger services sector and a possible revival in exports.

On the global stage, the economic picture remains bleak. The World Bank has downgraded global growth to 2.3%, calling it the slowest pace since 2008, excluding years of outright global recessions. “This year alone, our forecasts indicate the upheaval will slice nearly half a percentage point off the global gross domestic product (GDP) growth rate that had been expected at the start of the year,” said World Bank Chief Economist Indermit Gill. “That’s the weakest performance in 17 years, outside of outright global recessions.” He further warned that by 2027, average global GDP growth in the 2020s is expected to be just 2.5% — the slowest for any decade since the 1960s.