The Organisation for Economic Cooperation and Development (OECD) predicts India’s GDP growth rate to be 7.6% for 2025-26, 6.1% for 2026-27, and 6.4% for 2027-28, maintaining its position as the world’s fastest-growing major economy. The OECD’s interim Economic Outlook report highlights that global economic resilience is being tested due to conflicts in the Middle East, leading to disruptions in energy supply chains and a surge in energy prices.
China’s growth rate is expected to slow down from 5.0% in 2025 to 4.4% in 2026 and 4.3% in 2027, influenced by various factors such as the end of government subsidies, rising energy import prices, ongoing real estate adjustments, and weakening investment growth due to anti-involution measures. The report also mentions significant reductions in effective tariffs by the United States for emerging-market economies like Brazil, China, India, and Indonesia.
Inflation in emerging-market economies is projected to rise from 4.1% in 2025 to 4.4% in 2026 before easing to 3.3% in 2027. India is expected to experience an increase in inflation from 2% in FY 2025-26 to 5.1% in FY 2026-27 and 4.1% in FY 2027-28, mainly due to the recent spike in global energy prices. The report suggests that India’s central bank might temporarily raise policy rates in the second quarter of 2026 to counter stronger inflationary pressures.
Global GDP growth is forecasted to remain stable at 2.9% in 2026, rising slightly to 3% in 2027, driven by technology-related investments and decreasing effective tariff rates. However, the ongoing conflict in the Middle East poses uncertainties and could impact global demand. The report emphasizes the importance of reducing reliance on imported fossil fuels, enhancing energy efficiency, and promoting clean energy initiatives to mitigate geopolitical risks and support long-term resilience.
A prolonged disruption in energy supply chains could lead to adverse outcomes, warned the report, underscoring the significance of measures to lower exposure to geopolitical shocks and alleviate cost pressures for households and businesses.
