NEW DELHI: The World Bank in its latest south Asia economic update Wednesday said India is expected to remain the main driver of regional growth, with output for the current financial year projected at 6.6%, up from 6.3% projected in Oct. It noted that growth is estimated to have accelerated from 7.1% in FY25 to 7.6% in FY26, owing to strong domestic demand and export resilience. “Private consumption growth was particularly robust, supported by low inflation and rationalization of the GST. Growth is projected to decelerate to 6.6% in FY27, reflecting headwinds from the West Asia conflict. The impact of these is highly uncertain: other forecasters have revised their growth projections to a range between 5.9 and 6.7%,” it noted. The global lender also warned that inflation could rise due to strong demand, even as the reduction in GST rates should continue to support consumer demand in the first half of FY27. It further noted that growth in South Asia is expected to slow to 6.3% in 2026 from 7% in 2025 due to disruptions in global energy markets.
