India's GDP Growth Seen At 7.6% In FY26, Slowing To 6.1% In FY27: OECD

(MENAFN- KNN India) New Delhi, Mar 27 (KNN) The Organisation for Economic Cooperation and Development (OECD) has projected India's GDP growth at 7.6 per cent for FY2025–26, moderating to 6.1 per cent in FY2026–27, according to its latest interim Economic Outlook report.

The report noted that easing US tariffs could support India's growth in the near term. However, it cautioned that factors such as gas rationing and the gradual withdrawal of fiscal support may weigh on economic activity going forward. Growth is expected to stabilise at 6.4 per cent in FY2027–28, PTI reported.

Impact of West Asia Developments

The OECD highlighted that the evolving conflict in the Middle East has significant economic implications beyond the region. Disruptions in shipments through key routes such as the Strait of Hormuz and damage to energy infrastructure have led to a surge in global energy prices.

These developments have affected the supply of critical commodities, including energy and fertilisers, posing risks to global economic stability.

Inflationary Pressures

The report projected that inflation in India may rise due to increasing global energy prices and the fading impact of earlier price-reducing factors. Inflation is expected to increase from around 2 per cent in FY2025–26 to 5.1 per cent in FY2026–27, before easing to 4.1 per cent in FY2027–28.

In response to rising inflationary pressures, India may see a temporary increase in policy rates in the second quarter of 2026, particularly among emerging market economies.

The report also noted that US bilateral tariff rates have declined following a Supreme Court ruling, benefiting several emerging economies, including India. However, overall US tariff levels remain higher than pre-2025 levels.

Global Growth Outlook

At the global level, the OECD expects economic growth to slow to 2.9 per cent in 2026, before improving slightly to 3 per cent in 2027, reflecting ongoing geopolitical uncertainties and supply chain disruptions.

(KNN Bureau)

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