The Business Bytes
THEBUSINESSBYTES BUREAU
WASHINGTON, JUNE 10, 2025
The World Bank has maintained its projection for India’s economic growth at 6.3% for the fiscal year 2025–26 (FY26), reaffirming the country’s status as the fastest-growing major economy globally, according to the latest Global Economic Prospects report released on Tuesday.
While India’s growth moderated in FY2024–25, primarily due to a slowdown in industrial output, the World Bank highlighted strong resilience in other sectors. “Construction and services activity remained steady, and agricultural output rebounded from severe drought conditions, aided by sustained rural demand,” the report noted.
Looking ahead, the global financial institution expects India’s growth to rebound to an average of 6.6% in the subsequent two fiscal years (FY27 and FY28). This recovery, it said, will be driven by robust services activity and a pickup in exports, underscoring the country’s expanding role in the global value chain.
India’s strong economic outlook comes amid a gloomy global backdrop. The World Bank warned that global growth is projected to slow to 2.3% in 2025, nearly half a percentage point below earlier estimates and the weakest pace since 2008, outside of formal recessions. Growth forecasts have been downgraded for nearly 70% of economies worldwide, due to persistent trade tensions and policy uncertainties.
“A global recession is not on the horizon,” the report said, “but if current projections hold, the average global growth for the first seven years of the 2020s will be the slowest of any decade since the 1960s.”
In a striking assessment, Indermit Gill, Chief Economist and Senior Vice President for Development Economics at the World Bank Group, said, “Outside of Asia, the developing world is becoming a development-free zone.” He noted that growth in developing economies has steadily declined, from 6% in the 2000s to under 4% in the current decade.
The report highlighted a sharp decline in global trade and investment growth, alongside mounting debt levels, as key concerns. Trade growth, once averaging 5% in the 2000s, has now fallen below 3% in the 2020s.
In light of these challenges, the World Bank urged developing countries to pursue strategic trade and investment partnerships, diversify trade through regional agreements, and focus on domestic revenue mobilisation. It also recommended prioritising fiscal spending on vulnerable populations and reinforcing fiscal policy frameworks to ensure long-term economic stability.
India’s continued economic expansion offers a rare bright spot in a slowing global economy. Its resilience, driven by domestic demand and a dynamic services sector, positions the country as a key player in driving global growth in the years to come.
