India's Economic Growth Rate to be 6.5%: World Bank

The World Bank has projected India's economic growth rate at 6.5% in the fiscal year 2026. Earlier in June, the World Bank had estimated a growth rate of 6.3%. This upward revision is attributed to strong domestic demand, robust rural development, and positive effects of the Goods and Services Tax (GST) reforms.

Regarding South Asia's growth, the World Bank noted that India will remain the fastest-growing major economy in the world, supported by strong consumption growth. The World Bank has forecasted South Asia's growth rate at 6.6% for the current year, although it expects a slowdown to 5.8% in 2026, which is lower than the earlier April forecast by 0.6 percentage points.

The World Bank also warned that uncertainties such as socio-political unrest and disruptions in the labor market due to emerging technologies like artificial intelligence (AI) could pose risks to South Asia's economic stability.