India will remain the world’s fastest-growing major economy, according to the latest World Bank report. The country’s strong consumption growth, better farm output, and rising rural wages are driving this momentum.
The World Bank increased India’s GDP forecast for FY26 to 6.5%, up from 6.3% projected in June. The rise comes from resilient domestic demand, tax reforms, and strong rural recovery. Bangladesh’s growth is pegged at 4.8%, while Bhutan’s estimate fell to 7.3% due to hydropower delays. Growth in Maldives is expected at 3.9%, and Nepal may slow to 2.1% amid unrest.
Sri Lanka’s forecast has been upgraded to 3.5%, supported by tourism and service exports. South Asia’s overall growth is projected at 6.6% in 2025 but may ease to 5.8% in 2026 due to global and regional risks, including trade uncertainty and AI-related disruptions.
World Bank Vice President Johannes Zutt urged South Asian nations to address risks and embrace AI for productivity gains. The report also advised reforms to boost jobs, improve connectivity, and expand safety nets for workers affected by technology shifts.
