India’s growth steady at 6.7%, South Asia to reach 6.2%: World Bank

The World Bank projects India’s economic growth to remain steady at 6.7% annually for fiscal years 2025–26 and 2026–27, driven by resilient private consumption, expanding services, and strengthened manufacturing. While South Asia’s growth is set to rise to 6.2% in 2025–26, other countries like Bangladesh face hurdles from political uncertainty and supply constraints. India continues to anchor the region’s economic resilience amid shifting global dynamics.

The World Bank projects India’s economic growth to remain steady at 6.7% per annum for the fiscal years 2025–26 and 2026–27, driven by sustained services sector expansion and strengthening manufacturing activity, supported by government initiatives to improve the business environment. Investment growth is expected to stabilize, with a rise in private investment offsetting a moderation in public investment.

For fiscal year 2024–25, growth in India is projected to soften to 6.5% due to slower investment and weaker manufacturing growth. However, private consumption has shown resilience, supported by improved rural incomes and a recovery in agricultural output.

In South Asia, regional growth is expected to reach 6.2% in 2025–26, bolstered by India’s firm growth. Excluding India, the region’s growth is forecasted at 3.9% in 2024, with recoveries in Pakistan and Sri Lanka attributed to improved macroeconomic policies addressing prior economic challenges. Growth outside India is expected to rise to 4.0% in 2025 and 4.3% in 2026.

Bangladesh faces slower growth due to political unrest in mid-2024, energy shortages, and import restrictions, which have weakened industrial activity and increased price pressures. Its growth is projected to fall to 4.1% in FY2024–25 before recovering to 5.4% in FY2025–26. Political uncertainty is likely to keep investment and industrial activity subdued in the short term.

Overall, South Asia’s economic outlook shows promise, with India leading regional growth while other countries navigate political and economic challenges.