The World Bank has raised India’s economic growth forecast for fiscal year 2027 to 6.6%, cementing the country’s status as the fastest-growing large economy globally even as it slashed projections for much of the rest of the world. The upgrade, announced Thursday in the bank’s June 2026 Global Economic Prospects report, comes despite a broader global slowdown driven by rising energy prices and fallout from the ongoing West Asia conflict.
Global growth is now expected to slow to 2.5% in 2026 from 2.9% in 2025, marking the weakest pace since the Covid-19 pandemic. Against this dim backdrop, India’s upgraded trajectory stands as a notable outlier. The new FY27 forecast represents an increase from the January estimate of 6.5%, while the FY28 projection was lifted to 7.2% from 6.6%.
“India remains the fastest growing large economy in the world,” said Ayhan Kose, deputy chief economist at the World Bank, during a media briefing. He attributed the stronger outlook to “incredible dynamism” in domestic demand, which so far has more than offset the adverse impact of the Middle East conflict.
The report acknowledges that India’s FY27 growth will moderate from an estimated 7.6% in FY26, with higher energy prices and rising input costs weighing on private demand. However, a reduction in Goods and Services Tax rates is expected to support consumer spending, providing a cushion against these pressures.
BMI, a Fitch Group company, independently projected 6.6% GDP growth for FY27 in a report released this week, aligning with both the World Bank and the Reserve Bank of India. The firm attributed the expected slowdown from FY26’s 7.7% pace to weaker investment growth and trade shocks from the West Asia crisis, while noting the figure still exceeds India’s decade-long average of 6.1%.
Fitch Ratings itself took a more cautious stance, lowering its FY27 projection to 6.4% on June 8, citing the economic drag from the regional conflict. The divergence between BMI and Fitch underscores varying assessments of how severely the West Asia crisis will impact India’s growth trajectory.
Looking beyond FY27, the World Bank’s 7.2% FY28 forecast suggests confidence in a rebound as energy supplies recover and trade strengthens. India is projected to grow 7% in calendar year 2028. South Asia as a whole is expected to remain the fastest-growing region globally, with regional growth projected to recover to 6.9% in 2027 after slowing this year.
“All in all, India has put the necessary policy measures in place,” Kose said. “When we look at the big picture for India, there is still incredible dynamism.” The upgraded forecasts position India as a critical anchor for global economic stability even as the broader international economy faces mounting headwinds.
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