2 hrs ago
World Bank Raises India’s FY27 Growth Forecast to 7.1%
The World Bank now expects India’s economy to grow faster than it forecast earlier.
It predicts growth of 7.1% in the 2026–27 fiscal year.
The Bank says recent growth was stronger than expected, including 7.8% in the first quarter.
Industry and services are expected to help make up for weaker farming.
Less-than-expected rainfall could hurt crops and spending in rural areas.
The Bank also expects South Asia to grow, though its forecast is lower when India is excluded.
It warned that the region’s working-age population will grow more slowly in the coming years.
The report also says many Indian businesses expect little productivity gain from using AI.
The World Bank raised India’s FY27 growth forecast to 7.1%, from 6.6% in April.
It cited stronger-than-expected growth, including 7.8% GDP growth in the first quarter.
Industry and services are expected to offset weaker agricultural prospects; rainfall shortages may weigh on rural demand.
The Bank forecasts South Asia growth of 6.9% in 2026, but 3.6% excluding India, mainly after a Bangladesh downgrade.
The report warned that demographic tailwinds are fading and AI productivity benefits remain limited for many Indian firms.
- Who
- The World Bank, in its India and South Asia economic updates.
- What
- It raised India’s FY27 GDP growth forecast to 7.1%, from 6.6% in April.
- Where
- India and the wider South Asia region.
- When
- The forecast was reported on Tuesday; it covers fiscal year 2026–27.
- Why
- Growth held up better than expected, including a strong first quarter, while industry and services are expected to offset agricultural weakness.
Key facts
- India growth forecast, FY27
- 7.1%, up from 6.6% in April
- India GDP growth, first quarter
- 7.8%
- India growth forecast, FY28
- 7.2%
- South Asia growth forecast, 2026
- 6.9%, up from 6.3%
- South Asia forecast excluding India, 2026
- 3.6%, down from 4.1%, largely due to a downgrade for Bangladesh
- Indian firms reporting AI use
- 23%, compared with 43% of US firms
- Indian firms expecting almost no AI productivity benefit
- Almost 75%
Quotes
Franziska Ohnsorge
World Bank Group Chief Economist for Asia.
“The adoption of AI has the potential to transform South Asia’s development trajectory by boosting labor productivity, expanding export opportunities, and improving public service delivery. But to reap these benefits, governments need to address the foundational gaps that hold back adoption.”
indianexpress.com
“South Asia’s transition to an ‘aged’ population is unusually compressed. Most South Asian countries will complete this transition at income levels below those at which other emerging economies even began it.”
indianexpress.com
Sources
Related news
Global Agencies Raise India’s FY27 Growth Forecasts Toward 7%
Four Global Agencies Raise India’s FY27 Growth Forecasts
S&P Raises India’s FY27 GDP Growth Forecast to 7 Percent
Moody’s Raises India’s FY27 GDP Growth Forecast to 7%
Fitch Raises India's FY27 Growth Forecast, Predicts RBI Rate Hike
ADB Lifts India FY27 Growth Forecast to 7% Amid Investment
India Renews Approvals for Nepal’s 98 MW Power Exports
India’s Foreign Policy Faces a World of Situationships
Gwalior Trafficking Probe May Be Referred to NIA
Seven Suspected Bangladeshi Nationals Detained in Nalasopara Police Raid
