World Bank projects India’s growth at 7.2% in FY26 on "resilient activity"
New Delhi: The World Bank has projected India’s economic growth at 7.2 per cent in FY2025-26, saying strong domestic demand despite rising global trade tensions, the World Bank said on Tuesday.
According to NDTV, in its latest Global Economic Prospects report released on Tuesday, the World Bank said India’s resilience has lifted overall growth in South Asia in 2025, offsetting the impact of heightened policy uncertainty and global trade frictions.
The report noted that growth in South Asia strengthened to 7.1 per cent in 2025, “mainly because of resilient activity in India.” The World Bank does not include Pakistan and Afghanistan in South Asia, and their economies are included in the Middle East and North Africa division.
India's expansion is "mainly reflecting robust domestic demand, including strong private consumption, supported by earlier tax reforms and improvements in real household earnings in rural areas", the bank said.
The World Bank projected India’s growth to moderate to 6.5 per cent in FY2026-27, assuming higher US import tariffs remain in place, before edging up to 6.6 per cent in FY2027-28. The bank attributed this to strong services activity, a recovery in exports, and improved investment flows.
Despite higher tariffs on certain Indian exports to the United States, the report said India’s growth outlook remains unchanged from earlier projections because "the adverse impacts of higher tariffs will be offset by stronger momentum in domestic demand than previously anticipated".
Across South Asia, India continues to be the region’s primary growth engine. Excluding India, growth in South Asia is forecast to rise to 5.0 per cent in 2026 and 5.6 per cent in 2027, while the region as a whole is expected to slow to 6.2 per cent in 2026 before rebounding.
For developing economies, including India, the report stressed the importance of improving productivity and job creation. It said per capita income growth in developing economies is projected at 3 per cent in 2026, well below long-term averages, limiting convergence with advanced economies.
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Wholesale price inflation rises to 8-month high of 0.83 pc in December
New Delhi (PTI): Wholesale price inflation increased for the second month in a row, rising 0.83 per cent in December 2025, driven by an uptick in prices of food, non-food articles, and manufactured items on a month-on-month basis, government data showed on Wednesday.
After witnessing a deflationary trend in the previous two months, the wholesale price index (WPI)-based inflation returned to positive in December. In November and October, the pace of price rise was negative at (-) 0.32 per cent and (-) 1.02 per cent, respectively.
In contrast, WPI inflation was 2.57 per cent in December 2024.
"Positive rate of inflation in December 2025 is primarily due to an increase in prices of other manufacturing, minerals, manufacture of machinery and equipment, manufacture of food products, and textiles, etc," the industry ministry said in a statement.
According to WPI data, deflation in food articles was 0.43 per cent in December, as against 4.16 per cent in November.
In vegetables, deflation was 3.50 per cent in December, compared to 20.23 per cent in November.
Barclays India Chief Economist Aastha Gudwani said narrowing deflation in "food articles" and a rise in inflation in "manufacturing products" drove the increase in the headline WPI inflation in December. "We expect modest increases in WPI inflation to continue".
In case of manufactured products, WPI inflation inched up to 1.82 per cent from 1.33 per cent in November 2025.
The non-food articles category showed an inflation of 2.95 per cent in December, against 2.27 per cent in November.
Negative inflation or deflation continued in the fuel and power sectors, at 2.31 per cent in December, against 2.27 per cent a month ago.
ICRA Senior Economist Rahul Agrawal said led by the hardening in YoY food inflation owing to an unfavourable base, rise in global commodity prices, and sustained pressure on the USD/INR pair over the past few months, ICRA expects the YoY WPI inflation to rise to 1.5 per cent in January, the highest level in 10 months.
Data released earlier this week showed the country's retail inflation inching up to 1.33 per cent in December, from 0.71 per cent in November, driven by rising food prices.
The Reserve Bank of India (RBI) has reduced policy interest rates by 1.25 percentage points in the current fiscal year as inflation remained low.
The Reserve Bank, last month, significantly lowered the inflation projection for the current fiscal to 2 per cent from 2.6 per cent estimated earlier, as the economy continues to witness rapid disinflation.
The RBI mainly tracks retail inflation for deciding on benchmark interest rates.
Last month, the RBI cut key policy interest rates by 25 bps to 5.25 per cent, saying that the Indian economy is in a "rare Goldilocks period" marked by high growth and low inflation.
The Reserve Bank has raised its FY26 GDP growth projection to 7.3 per cent, from an earlier estimate of 6.8 per cent. India recorded an 8.2 per cent growth in the September quarter, and 7.8 per cent in the June quarter.
