The World Bank on Wednesday lowered India’s growth forecast for the current fiscal by 4 percentage points to 6.3 per cent amid global economic weakness and policy uncertainty.
In its previous estimate, the World Bank had projected India’s growth at 6.7 per cent for the fiscal year 2025-26.
In India, growth in FY24/25 disappointed because of slower rise in private investment and public capital expenditures that did not meet government targets, the World Bank said in its twice-yearly regional outlook.
“In India, growth is expected to slow from 6.5 per cent in FY24/25 to 6.3 per cent as in FY25/26 as the benefits to private investment from monetary easing and regulatory streamlining are expected to be offset by global economic weakness and policy uncertainty,” said its South Asia Development Update, Taxing Times.
On Tuesday, the International Monetary Fund (IMF) also lowered India’s GDP forecast for the current fiscal to 6.2 per cent from its January estimates of 6.5 per cent.
The World Bank report said the benefits to private investment from monetary easing and regulatory streamlining are expected to be offset by global economic weakness and policy uncertainty.
“Private consumption is expected to benefit from tax cuts, and the improving implementation of public investment plans should boost government investment, but export demand will be constrained by shifts in trade policy and slowing global growth,” it said.