World Bank: India Poised to Stay Fastest-Growing Amid Energy Shocks
World Bank: India Poised to Stay Fastest-Growing Amid Energy Shocks
The World Bank says India’s growth remains powered by domestic demand and public investment, even as energy volatility could trim momentum.
India is projected to stay the world’s fastest-growing major economy even as global energy market shifts pull on momentum. The World Bank pegs India’s growth at about 7.6% in FY26, followed by around 6.6% in FY27, as energy costs and external uncertainties bite.
Behind the forecast are robust domestic consumption, resilient services exports, and sustained public investment. Government-led infrastructure spending and steady urban demand are expected to keep activity firm even when global conditions turn less favourable.
Energy shocks are the key risk. India’s heavy reliance on imported crude makes it vulnerable to oil-price swings, with higher energy costs likely to lift inflation through fuel and transport prices, widen the current account deficit, and put pressure on the rupee as global financial conditions tighten.
Externally, weaker global demand could weigh on trade, but recent trade deals and supply-chain diversification are expected to create new opportunities for exporters and help offset some pressure.
Fiscal and policy challenges loom too. If subsidies or other support measures are expanded to shield consumers from price rises, the government could face higher fiscal pressures while trying to maintain macro stability.
South Asia’s growth is projected to slow to about 6.3% amid energy shocks, though the region’s rebound remains supported by India’s strong domestic demand and export resilience.
