World Bank raises India’s GDP growth forecast: from 6.6% to 7.1% for FY27, benefiting from strong first quarter data

The World Bank has increased India’s GDP growth forecast for the financial year 2026-27 to 7.1%. Earlier in April, the World Bank had estimated the GDP growth rate for FY27 at 6.6%. The organization has said this in its latest report ‘India Development Update’ released on Tuesday, September 6.

Despite global trade and tensions in the world, India’s economy has performed better than expected. The GDP growth of 7.8% recorded in the first quarter of FY-27 i.e. April-June has played an important role in this upgrade of the World Bank.

Demand is big in villages and cities, export is also big

According to the World Bank, investment and domestic consumption have been the biggest contributors to India’s economic growth.

Demand in both villages and cities: Demand has increased due to good farming, government assistance, subsidies and low inflation. On the other hand, after tax relief and GST reduction, there has been a surge in urban consumption.

Export Major: Despite adverse conditions at the global level, India’s exports have performed much better than expected, which is being considered as the biggest positive factor for the growth of FY27.

Good performance of infrastructure and power sector

On the supply side, the industrial sector has performed well despite global challenges. Growth in infrastructure and construction goods increased to 7.2% in the first quarter from 6.1% last year. Due to the scorching heat, the demand for utilities increased, due to which the electricity sector registered a growth of 9.3%.

The pace of economy was 7.8% in FY-26

The World Bank reported that India’s economy had grown at a faster pace of 7.8% in FY26 after growing at a rate of 7.2% in FY25. Policies and easy credit environment had neutralized the impact of global trade tensions.

In FY27 too, the growth rate is expected to slow down slightly in the coming quarters after being 7.8% in the first quarter, but the overall trend will remain strong.

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In the first quarter of the current financial year i.e. April-June, the country’s real GDP growth has been recorded at 7.8%. Praising India’s better performance, IMF said that this growth has been much better than expected on the basis of strong services sector and better exports. Read the full news…