World Bank reduced India’s growth rate of financial year 2026: After Fitch Ratings and Reserve Bank of India (RBI), the World Bank has now reduced India’s economic growth rate. Amid global economic weakness and policy uncertainty, the World Bank on Wednesday reduced India’s development estimate for the current financial year (2025-26) to 6.3 percent.
Significantly, the pace of global economic development has slowed down due to the ongoing trade war and the ongoing wars between many countries around the world. It is also expected to affect India. The World Bank, in its previous forecast, had estimated India’s growth rate of 6.7 percent in FY 2025-26. The World Bank said in its biennial regional perspective that India’s growth in FY 2024-25 will be disappointing, as private investment has increased at a slow pace and public capital expenditure has failed to meet government goals.
What does the report say?
According to the World Bank’s recent report ‘South Asia Development update-taxing Times’, India’s economic growth rate is expected to be reduced from 6.5 percent to 6.5 percent in FY 2024-25 to 6.3 percent in FY 2025-26. The main reason for this is that repo rate cuts and regulatory simplification can promote private investment, but this benefit can be limited due to global economic recession and policy uncertainty.
The World Bank report also states that tax deduction will promote private consumption, while better implementation of public investment schemes will increase government investment. However, India’s export sector may face challenges due to changes in trade policies and recession in global development. In addition, the report states that global economic uncertainty has also weakened the economic possibilities of South Asia, and development forecasts for most countries have been revised.
International Monetary Fund reduced India’s GDP growth estimate
The International Monetary Fund (IMF) on Tuesday reduced India’s GDP growth estimate. The estimated interest rate in January was 6.5 percent, which has now been reduced to 6.2 percent for the current financial year. Fitch Ratings have reduced India’s GDP (GDP) growth estimate for the current financial year 2025-26 to 6.4 percent. Amid the recession in economic activities, the RBI has reduced its development estimate for the financial year ending March 2025 from 7.2 percent to 6.6 percent.
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