SLUG: BOOMING AMID CRISIS
New Delhi
India is expected to remain one of the fastest-growing major economies globally despite a broader slowdown, with growth projected at around 6.6% in FY27, according to a new World Bank update.
The report noted that rising energy prices driven by geopolitical tensions in the Middle East and ongoing supply chain disruptions are weighing on global economic activity. However, India’s strong macroeconomic fundamentals are expected to provide resilience against external shocks.
Key buffers include substantial foreign exchange reserves, low inflation, a healthy financial sector, and predominantly rupee-denominated public debt. These factors help shield the economy from global volatility and support sustained growth momentum.
The World Bank said India’s growth outlook also depends on boosting private sector-led expansion and improving the business environment to unlock investment and job creation across sectors such as energy, infrastructure, manufacturing, healthcare, and tourism.
The report further highlighted that South Asia is projected to grow at 6.3 per cent in 2026, slightly lower than 7 per cent in 2025, before recovering to 6.9 per cent in 2027. Despite the moderation, the region continues to outperform most other emerging markets.
It also warned that prolonged global conflict could significantly impact inflation and growth worldwide, with inflation potentially rising by up to 300 basis points in adverse scenarios. Industrial policy use has also increased across the region, though outcomes have been mixed.
