OECD pegs FY26 India Growth at 6.3%

The Organisation for Economic Co-operation and Development (OECD) estimates India’s GDP growth to be 6.3% in 2025-26 and slightly higher at 6.4% in 2026-27, the intergovernmental organization said in its latest Global economic outlook report. The report says India and Indonesia are projected to continue to experience strong and broadly stable economic growth. “While easing monetary policy will aid ongoing expansions in both economies, higher tariffs in the United States, global trade policy uncertainty, and domestic fiscal policy uncertainty in Indonesia, will have an offsetting effect… Inflation in both economies is projected to remain largely benign, although past currency depreciation in Indonesia will feed through into higher domestic prices and push up inflation this year,” said the report. It expects the annual headline inflation in the G20 economies to collectively moderate from 6.2% to 3.6% in 2025 and 3.2% in 2026.
The report also says that the employment growth is projected to be more resilient in some non-OECD emerging economies, such as India and South Africa, but to continue to slow in China as the ageing population further reduces labour supply. Meanwhile, the report projects global growth slowing from 3.3% in 2024 to 2.9% in both 2025 and 2026. The slowdown is expected to be most concentrated in the United States, Canada, Mexico and China, with smaller downward adjustments in other economies. According to it, GDP growth in the US is projected to decline from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026. In the euro area, growth is projected to strengthen modestly from 0.8% in 2024 to 1.0% in 2025 and 1.2% in 2026. China’s growth is projected to moderate from 5.0% in 2024 to 4.7% in 2025 and 4.3% in 2026.“The inflationary pressures have resurfaced in some economies. Higher trade costs in countries raising tariffs are expected to push inflation up further, although the impact will be partially offset by weaker commodity prices,” says the report.