India the fastest growing economy, with a projected GDP growth of 6.4% for FY 2025–26 in the world, according to a new Reuters poll of 51 economists.
India The Fastest Growing Economy
This forecast, although slightly lower than last year’s 6.5%, reflects confidence in the country’s strong fundamentals—mainly driven by government spending and resilient domestic demand.
While India’s growth outlook remains optimistic, the latest economic projections highlight a mixed picture. On one hand, robust government spending on infrastructure, digital innovation, and energy is fueling momentum.
On the other, private investment and job creation, especially for the youth, remain sluggish. Economists point out that while headline numbers are strong, the underlying structural weaknesses—like uneven urban-rural development and weak exports—continue to weigh on long-term sustainability.
External factors are also playing a critical role in shaping India’s economic path. Rising geopolitical tensions and uncertainty over a pending trade deal with the United States are raising concerns.
The deal, which is yet to be finalized, faces a July 9 deadline—after which tariffs could be imposed on Indian goods, potentially affecting export-driven sectors. Despite these challenges, many analysts believe that India’s large domestic market and policy reforms could cushion any external shocks in the short term.
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