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World Bank Raises India’s GDP Forecast to 6.5% for FY26 in ‘South Asia Update October 2025’ Report.

Economy Business | Dated: 10 Oct 2025

In October 2025, the World Bank (WB) released its bi-annual report titled ‘South Asia Update October 2025: Jobs, AI, and Trade’, revising India’s Gross Domestic Product (GDP) growth forecast upward to 6.5% for FY2025-26 (FY26)—an increase of 20 basis points (bps) from its previous estimate of 6.3%. The report highlights India’s continued position as the world’s fastest-growing major economy.

🎯 Key Highlights:

  • - The World Bank upgraded India’s GDP forecast to 6.5% for FY26, citing strong domestic consumption, enhanced agricultural productivity, and rising rural wages as key growth drivers. The revised forecast reflects India’s economic resilience amid global uncertainties.
  • - The report noted that India will continue to outpace all other major economies in growth, supported by robust internal demand and structural reforms. It further projected that India would surpass China to become the single largest source of global energy demand by 2050.
  • - Despite a strong FY26 projection, the World Bank downgraded India’s FY27 GDP growth estimate to 6.3% from 6.5%, attributing the revision to the 50% tariff imposed by the United States of America (USA) on nearly three-quarters of Indian exports to the US.

💡 Other Important Facts:

  • (i) The report highlighted that around 20% of India’s goods exports, accounting for roughly 2% of GDP, were directed to the USA in 2024. These new tariffs are expected to adversely impact export revenues and industrial output, thereby moderating India’s growth trajectory.
  • (ii) The World Bank projected South Asia’s growth at 6.6% in CY2025, which will slow to 5.8% in CY2026 due to the US tariffs. For other South Asian nations, the report forecasted the following GDP growth rates: Bangladesh (4.8% in CY25, 6.3% in CY26); Nepal (2.1% and 4.7%); Sri Lanka (3.5% and 3.1%); Bhutan (7.3% and 6.1%); and the Maldives (3.9% and 4%) respectively.

📚 Test Your Knowledge:

The World Bank (WB) has recently raised India’s GDP growth forecast for FY2025-26 to what percentage in its South Asia Update October 2025 report?

Correct Answer: 6.5%

🚀 Quick Recap:

About World Bank (WB)

  • President : Ajay Banga
  • Headquarters: Washington, DC, the United States of America (USA)