India’s gross domestic product (GDP) growth for 2026 is anticipated to hit 7%, surpassing the previous estimate of 6.2% in April, as per a report by Bank of America (BofA) Securities. The report also forecasts a 7% growth rate for India in 2027. Additionally, it predicts that the international oil benchmark Brent crude will average $72 a barrel in the second half of 2026 and $65 per barrel in 2027, based on the assumption of peace in West Asia.
Analysts at the global brokerage have slightly raised their global growth projections to 3.2% for 2026 and 3.5% for 2027, marking a 10-bps upward revision for both years compared to their April update. The report introduces a forecast for 2028 at 3.3% and lowers global inflation to 3% this year, decreasing to 2.4% in 2027 and 2.5% in 2028.
The report highlights the likelihood of the global economy facing challenges from tighter financial conditions originating from the US in the future. It projects 75 basis points (bps) of Federal Reserve hikes in 2026, commencing in September. Due to factors like the US-Iran peace deal, corrections in crude oil prices, and robust first-quarter 2026 GDP figures, the firm expects EM Asia (excluding China) growth to expand by 5.9% in 2026, before growing by 5.8% in 2027.
The global economy is influenced by various factors such as US President Donald Trump’s policies, the artificial intelligence (AI) boom, China’s overcapacity, fiscal imbalances, and excess global liquidity. The report warns that while these factors have supported economic dynamics, they could become sources of weakness if there is a significant asset price correction.
According to BofA Securities, the labor market in the US has strengthened, while inflation dynamics have weakened. The report notes that despite some temporary factors and upcoming tariff changes, the majority of the Federal Open Market Committee (FOMC) appears to be growing impatient after five years of high inflation. Crude oil prices have experienced a significant drop of around 42% to $72 per barrel from their previous peak this year.
After the reopening of the Strait of Hormuz, a recent report indicates that on June 24, a new daily record high number of crossings was achieved, with 78 vessels passing through the strait. This marks a recovery to 57% of pre-war volumes on a daily basis.
