World Bank raises India’s FY26 GDP growth forecast to 6.5% on strong domestic demand

The report also recommends harnessing the potential of AI to boost productivity and incomes. The rapid development of AI is transforming the global economy and reshaping labour markets. South Asia’s workforce has limited exposure to AI adoption due to the predominance of low-skill, agricultural and manual jobs. But moderately educated, young workers, especially in sectors such as business services and information technology, are vulnerable. Since the release of ChatGPT, job listings have fallen by around 20% in jobs most exposed to, and most replaceable by AI, relative to other occupations.

Recently, global ratings agency S&P Global Ratings also retained India’s GDP forecast at 6.5% for 2025-26 (FY26) on strong domestic demand, favourable monsoon, GST reforms and the government’s infrastructure push. “We forecast India’s GDP growth to hold steady at 6.5% this fiscal year (year ending March 31, 2026). We expect domestic demand to remain strong, supported by a largely benign monsoon season, cuts in the income tax and the goods and services tax, and accelerating government investment,” S&P said in its Economic Outlook Asia-Pacific Q4 2025 report.