Private consumption, in particular, has increased significantly. The World Bank report said that low inflation and restructuring of the Goods and Services Tax (GST) rate have helped increase the spending capacity of consumers.
However, the reduction in GST rates is expected to continue to support consumer demand in the first half of fiscal year 2027. The World Bank said that while global energy prices remain high, there is a risk that it will increase inflationary pressures and affect households’ disposable incomes.
The half-yearly Regional Economic Outlook report released by the World Bank Group has noted that India’s strong performance has been a key pillar of South Asia’s economic growth. Strong domestic demand, along with tariff cuts and recent free trade agreements with the UK and the European Union, are expected to further support India’s economic growth.
World Bank Vice President for South Asia Johannes Jut said the prospects for growth in South Asia remain strong despite a challenging global economic environment.
