• The report stated that FY26 growth is mainly driven by robust domestic demand, including strong private consumption, which is further supported by tax reforms and rising household incomes in rural areas.

• What? Release of Global Economic Prospects(GEP) Report : January 2026
• Released by: World Bank Group (WBG)
• India’s GDP: 7.2% (FY26), 6.5% (FY27), and 6.6% (FY28)
• Global Growth Rate: 2.6% (CY26)
• South Asia Growth: 7.1%(CY25); 6.2%(CY26)

Other Key Projections:
India’s GDP for FY27: As per the report, India’s GDP growth rate is further projected to moderate to 6.5% in FY27 compared to its previous estimate of 7.2%, based on the assumption that 50% import tariffs imposed by the United States of America (USA) remain in place throughout the forecast horizon.

• However, India’s GDP is expected to edge up to 6.6% in FY28, aided by robust services activity, as well as a recovery in exports and a pickup in investment.
• The report further noted that the impact of higher tariffs on Indian exports to the USA is expected to be mitigated by stronger-than-anticipated momentum in domestic demand.

India’s Inflation: The report highlighted that India’s inflation is expected to converge to the Reserve Bank of India (RBI)’s inflation target i.e. at 4%, assuming stable seasonal conditions contain food price inflation.
Global Growth Rate: The report projected that the global growth rate will slow down marginally by 10 basis points (bps) i.e. from 2.7% in Calendar Year 2025 (CY25) to 2.6% (in CY26).
South Asia Region: The growth rate of the South Asia region is projected to increase to 7.1% in CY25, supported by robust economic activity in India that mitigates the impact of rising trade tensions and heightened policy uncertainty.

• However, it is expected to ease to 6.2% in CY26, indicating the impact of higher US tariffs on India’s export.
• The World Bank excludes Pakistan and Afghanistan from its South Asia region, categorizing their economies under the Middle East and North Africa (MENA) division.

About World Bank (WB):
President- Ajay Banga
Headquarters- Washington, DC, the United States of America (USA)
Established- 1944