India Remains Fastest-Growing Economy Despite Gulf War: World Bank

WASHINGTON, D.C.- India will remain the world’s fastest-growing major economy despite the economic shock from the conflict in the Middle East, with the World Bank on June 11 raising its growth forecast for the country even as it cut projections for much of the global economy.

In its latest Global Economic Prospects report, the World Bank upgraded India’s growth forecast for 2026 to 6.6 percent from its January estimate of 6.5 percent and raised its 2027 projection to 7.2 percent from 6.6 percent, citing stronger-than-expected domestic demand and economic resilience.

“India remains the fastest growing large economy in the world,” World Bank Deputy Chief Economist Ayhan Kose said.

Kose said the upgraded forecast reflects “stronger than expected growth momentum in domestic demand, which so far, more than offsets the adverse impact of the conflict in the Middle East.”

He said India’s economic fundamentals continue to provide support despite the uncertain global environment.

“All in all, India has put the necessary policy measures in place,” Kose said. “When we look at the big picture for India, there is still incredible dynamism.”

Even as global uncertainty persists, India was among the few major economies to receive an upgraded forecast from the World Bank.

The report said India’s continued expansion is expected to help South Asia remain the fastest-growing region in the world. Regional growth is projected at 6.3 percent in 2026 and is expected to recover to 6.9 percent in 2027. India is forecast to grow 7 percent in 2028.

The World Bank warned that the conflict in the Middle East is expected to slow global growth to 2.5 percent in 2026 from 2.9 percent in 2025, marking the weakest pace since the onset of the Covid-19 pandemic. Higher oil prices, rising inflation and tighter financial conditions are expected to weigh on economic activity across much of the world.

India’s resilience comes at a time when the World Bank expects growth in developing economies to fall to a post-pandemic low of 3.6 percent in 2026. The report warned that higher energy and fertilizer prices triggered by the Gulf conflict could create challenges for many emerging economies, particularly energy importers. (IANS)