The Organisation for Economic Co-operation and Development (OECD) in its Interim Economic Outlook has raised India's Gross Domestic Product (GDP) growth forecast for the current fiscal year 2026-27 (FY27) by 80 basis points to 7.1 per cent, up from 6.3 per cent projected in June. It said this upward revision is driven by resilient domestic demand and government policies that have helped cushion households and firms from the impact of elevated energy prices.
The Paris-based inter-governmental body said structural policy reforms that enhance the ability of economies to cope with supply side disruptions are also a key priority for governments at the current juncture. It said ‘despite recent strong momentum, reduced purchasing power is also expected to weaken growth in India through the second half of this year, before a gradual recovery takes place in 2027.’ On the annual basis, it said India’s growth is expected to moderate from 7.8% in FY26 to 7.1% in FY27 and further to 6.5% in FY28.
Among emerging-market economies, the OECD expects India to temporarily raise policy rates to help offset stronger inflationary pressures. In some emerging market economies, such as India, government price support measures are mitigating energy price pressures and will continue to do so in the near-term. The OECD projects India’s inflation to average 4.7 per cent in 2026. At the global level, it said economic prospects remain ‘heavily dependent’ on whether a durable resolution to the Middle East conflict is achieved.
