World Bank raises India's FY26 growth forecast to 6.5%
The World Bank now expects India's economy to grow 6.5% in FY26, up from its earlier 6.3% prediction.
This boost comes from strong local spending, better farm output, and higher rural wages. Simplifying the GST is expected to support economic activity.
Meanwhile, South Asia as a whole is expected to slow down next year, mainly due to trade disruptions such as higher US tariffs, with additional uncertainties from emerging technologies like AI.
US tariffs expected to impact India's FY27 growth
Looking ahead to FY27, India's growth outlook drops slightly to 6.3%.
The reason? New US tariffs in 2025 hit about three-quarters of Indian exports heading stateside—goods that made up roughly one-fifth of India's total exports last year—with some tariffs reaching a steep 50%.
AI threat to South Asian jobs
The World Bank warns that AI could automate or change about 22% of jobs in South Asia, especially affecting younger folks in services and IT.
Since tools like ChatGPT arrived, job postings in these fields have fallen by around 20%.
The bank suggests investing in better infrastructure and helping people learn new skills so everyone can keep up with the changing job market.