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World Bank cuts India’s 2026 growth forecast to 6.3% from 6.7%

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World Bank cuts India's 2026 growth forecast to 6.3% from 6.7%

NEW DELHI: The World Bank on Tuesday has lowered India’s GDP growth projection for the current financial year to 6.3% from 6.7% estimated in Jan on weaker exports and slower growth in investment.The cut for India came with a lower projection for global growth too – 2.3% in 2025, as against 2.7% estimated in Jan – marking the slowest rate of global growth since 2008, apart from outright global recessions. India will remain the fastest growing major economy.“Investment growth is expected to slow, primarily reflecting a surge in global policy uncertainty. In FY2026-27 and FY2027-28, growth is expected to recover to 6.6% a year, on average, partly supported by robust services activity that contributes to a pickup in exports,” the latest Global Economic Prospects said about India.There was good news on other parameters. For instance, in India, inflation is expected to remain contained, based on the assumption of normal seasonal conditions. Similarly, it said: “Fiscal consolidation is expected to continue in India over the forecast horizon, with growing tax revenues and declining current expenditures projected to contribute to a gradual decline in the public debt-to-GDP ratio.”To overcome the challenges, the World Bank group chief economist Indermit Gill made a case for rebuilding trade relations, arguing that halving tariffs compared to the levels seen in May can boost global growth by 0.2 percentage points in 2025 and 2026.“Most developing economies today tend to have far higher tariffs than high-income economies. If their goal is to accelerate growth, their best course of action will be to lower tariffs with respect to trading partners,” he said in the report. He also called for restoring fiscal order and accelerating job creation.





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