World bank warns of downside risks to India’s growth outlook

Thursday 09 April 2026 - 07:02

The World Bank has cautioned that risks surrounding India’s projected economic growth remain tilted to the downside, despite a generally stable macroeconomic environment.

India’s economy is expected to grow by around 6.6% in the 2026–2027 fiscal year, maintaining its position among the fastest-growing major economies. However, global uncertainties, rising commodity prices, and domestic pressures could weigh on this outlook.

Inflation is projected to remain close to 5%, driven largely by higher food and energy costs as well as exchange rate pressures. These factors may impact household spending and business activity, potentially slowing overall economic momentum.

At the same time, strong foreign exchange reserves and a well-capitalized banking system are seen as key buffers that could help the country manage external shocks. These structural strengths provide resilience in the face of global volatility.

Economists note that while India’s growth fundamentals remain solid, maintaining stability will require careful policy management, particularly in controlling inflation and supporting investment. The balance between growth and price stability will be crucial in the coming years.