World Bank bumps up FY27 India growth outlook to 7.1%

The World Bank has increased its growth forecast for India in the fiscal year 2027 (FY27) to 7.1%, up from the previously estimated 6.6%. This upward revision is attributed to the robust domestic demand and strong exports, which continue to show momentum despite global economic challenges. The World Bank projects India to remain one of the world's fastest-growing major economies and a key contributor to global growth.

However, the growth is expected to moderate in the second half of FY27 before picking up over the medium term, but risks remain high due to factors such as higher global oil prices, El Nino-related disruptions, and potential market corrections that could impact capital flows. The country's growth potential remains strong, supported by major reforms including labor code consolidation, GST reforms, tariff rationalization, the Insolvency Act, and significant infrastructure investments in both the real and digital economies.

For FY28, the World Bank projects a growth rate of 7.2%. Looking ahead to FY29-30, growth is expected to average 7.1%, with a narrowing current account deficit and declining inflation, assuming normalisation of global energy markets.