World Bank Raises India FY27 Growth Forecast To 7.1%; Economy To Outpace Regional Peers

The World Bank has raised its growth forecast for India for FY27 to 7.1%, up from its earlier projection of 6.6%.

The revised forecast was released in the World Bank's October 2026 South Asia Economic Update on Tuesday, October 6. The world bank announced this upgrade after India's economy recorded stronger-than-expected growth in the first quarter of FY27.

India GDP Growth Forecast Raised

According to the World Bank report, India's economy is estimated to have grown 7.8% in FY26, higher than the 7.2% growth recorded in 2024-25 and also above the Bank's earlier April estimate of 7.6%.

For FY27, the World Bank now expects India's GDP growth to moderate to 7.1%, while growth is projected to improve slightly to 7.2% in FY28.

India recorded 7.8% GDP growth in the April-June quarter, which served as a strong base for the World Bank's FY27 outlook.
Even though the growth outlook is strong, the World Bank has pointed out the weakness in agriculture as a potential risk to the Indian economy.

The bank said "strength in industrial and services activity is expected to offset some of the weakness in agriculture. However, a larger-than-expected monsoon deficit could affect agricultural output and rural demand."

According to the report, the impact of elevated energy costs has so far been cushioned by government measures and strong domestic demand.

However, inflation is expected to stay elevated into 2027, which could be an important factor for household consumption and monetary policy.

India's current account deficit was contained at 0.6% of GDP in FY26, according to the update.

South Asia To be Fastest-Growing Emerging Market Region

The World Bank has also raised its growth forecast for the South Asian region. South Asia is projected to grow 6.9% in 2026, compared with the earlier forecast of 6.3%. Growth is projected at 6.7% in 2027, keeping the region among the fastest-growing emerging-market regions globally.