India still fastest-growing economy, but set for a steep GDP fall this year: Blame it on oil
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The World Bank predicts India will remain the fastest-growing major economy, with a growth rate of 7.6% in the financial year 2025-26, but expects a slowdown to 6.6% in 2026-27 due to rising energy costs. The slowdown is attributed to the impact of conflicts in the Middle East on oil prices, inflation, and foreign remittances.
The World Bank has forecast India's GDP growth to slow down in the current financial year. India's growth rate is expected to drop from 7.6% to 6.6% due to rising energy costs caused by conflicts in the Middle East. The country's strong fundamentals and policy buffers offer some insulation against significant downside risks. India's exports to the Middle East and foreign remittances are also expected to be impacted. The World Bank believes India's recent free trade agreements will help boost private sector-led growth and strengthen economic resilience. Despite the slowdown, India is expected to remain the fastest-growing major economy.
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