The World Bank expects India’s economy to grow at about 6.5% in FY 2026–27, slightly lower than the Indian government’s estimate of 7.4%. Despite this difference, the projected growth rate remains robust and places India among the fastest-growing major economies in the world.
Growth may slow mainly due to high import tariffs of around 50% imposed by the United States, which reduce the competitiveness of Indian exports in the global market. However, the overall impact is expected to be limited because Indian consumers are spending more, and strong domestic demand continues to support economic activity, helping to offset the weakness in exports.
Growth is expected to strengthen to roughly 6.6% in FY 2027–28, with the services sector—especially IT, finance, and tourism—acting as the primary engine. Improved export conditions and increased investment are also expected to play a key role in boosting economic activity and sustaining the upward momentum in growth.
Developing countries are seeing mixed results. Their growth is expected to be around 4% in 2026 and 4.1% in 2027, while low-income countries could do better, averaging 5.6% growth. However, there is a problem: people’s incomes are rising too slowly. Even with this growth, the average income per person in developing countries will be only about 12% of what it is in rich countries, meaning the gap between rich and poor nations is not getting smaller.
The global economy is expanding at a slow but steady pace, with growth projected at 2.6% in 2026 and 2.7% in 2027. These figures are slightly higher than earlier forecasts, suggesting that global economic conditions are more resilient than initially feared, despite ongoing trade tensions and policy uncertainty.
This is worrying because slow growth combined with high debt can put heavy pressure on government budgets and create problems for banks and credit markets.
