The World Bank has raised its 2026 growth forecast for South Asia to 6.9%. The upgrade reflects stronger private investment and resilient exports across the region.

India remains the growth engine. The lender expects the Indian economy to expand 7.1% in FY27, up from an earlier estimate of 6.9%.

The report pointed to steady domestic demand and improving manufacturing activity. It also noted that services exports continue to hold up well.

Risks remain. A global slowdown or fresh trade tensions could weigh on the outlook. But the bank said the region’s fundamentals are strong enough to absorb shocks.

The forecast lands as India’s own central bank also raised its growth view to 7% for FY26. The numbers together paint a picture of an economy outpacing most large peers.

The upgrade also reflects reforms in logistics and digital infrastructure. The report praised India’s public digital rails for lifting productivity. It cautioned that job creation must keep pace with growth. Manufacturing incentives are drawing new investment, it noted. On inflation, the bank said price pressures remain contained. The FY27 outlook of 7.1% would keep India the fastest-growing major economy.