In its April 2026 South Asia Economic Update, the World Bank has upgraded India's GDP growth forecast for the fiscal year 2026-27 (FY27) to 6.6%, an increase from the previous estimate of 6.3%. Despite this adjustment, growth is expected to slow from 7.6% in FY26, reflecting the ongoing challenges posed by geopolitical tensions, particularly in the Middle East. The World Bank attributes the robust growth in FY26 to strong domestic demand and resilient exports, with private consumption benefiting from low inflation and adjustments to the Goods and Services Tax (GST). However, the forecast for FY27 indicates potential headwinds, including elevated global energy prices that may pressure household disposable income and soften government consumption growth due to increased subsidy costs for cooking fuel and fertilizers. Investment growth is also anticipated to slow amid rising input costs and uncertainty in the global market, particularly as major trading partners experience slower growth.