New Delhi- The latest report from the World Bank has raised India’s GDP growth forecast to 7.2% for the current fiscal year, showing a significant increase from the previous projections in June. This upward revision is attributed to strong domestic demand and ongoing tax reforms.

The “Global Economic Prospects” report by the World Bank indicates that India’s growth is expected to slow to 6.5% in the fiscal year 2026-27. The forecast takes into account the impact of the 50% import tariffs imposed by the US, assuming they will remain in effect during the forecast period.

Despite the challenges posed by higher tariffs on certain exports to the US, India is anticipated to maintain the highest growth rate among the world’s major economies. The report emphasizes that the adverse effects of these tariffs will be offset by strong momentum in domestic demand and resilient exports.

The World Bank projects a growth rate of 6.6% in the fiscal year 2027-28, driven by robust services activity, export recovery, and increased investment.

Regarding the current fiscal year, the report states, “In India, growth is estimated to increase to 7.2% in fiscal year (FY) 2025/26, supported by strong private consumption and improvements in real household earnings in rural areas, following earlier tax reforms.”

Earlier estimates by the World Bank in June had pegged India’s growth at 6.3%. However, recent data from the Ministry of Statistics and Programme Implementation (MoSPI) suggests that the Indian economy is poised to grow by 7.4% in the current fiscal year.

The report also highlights the depreciation of the Indian rupee due to capital outflows triggered by US tariffs and trade-related uncertainties. Despite these challenges, the global economy has shown resilience to trade tensions and policy uncertainties.

The past year saw a strong global economic recovery marked by stockpiling of goods, increased AI spending, and adaptation of supply chains to trade barriers. The report underscores the notable growth in the global economy, albeit with some divergence in performance across regions.