NEW DELHI — India will continue to be the world’s fastest-growing major economy in 2025–26, with growth projected at 6.7 percent, supported by strong private consumption and robust government spending on infrastructure, the Organisation for Economic Co-operation and Development (OECD) said Tuesday in its latest economic outlook.
The OECD forecast India’s real GDP to expand 6.7 percent in FY26, followed by 6.2 percent in FY27 and 6.4 percent in FY28. The report noted that while higher United States tariffs could weigh on India’s exports, private consumption will benefit from rising real incomes as inflation stays low and consumption taxes ease.
The outlook said buoyant investment will continue, driven by falling borrowing costs and sustained public capital expenditure. Current low inflation is expected to gradually align with the Reserve Bank of India’s 4 percent target. The OECD described risks as “broadly balanced,” saying bilateral negotiations with the U.S. could lower tariffs and boost exports, while elevated oil prices could renew inflationary pressure.
The report also highlighted India’s “broadly neutral” fiscal stance, which aims to support growth while rebuilding fiscal buffers and guiding public debt onto a more sustainable trajectory. It said continued public investment, paired with greater private-sector participation through expanded public-private partnerships, would accelerate infrastructure development and reduce long-standing bottlenecks.
With the RBI’s monetary policy committee set to meet December 3–5, the OECD noted that monetary policy has already eased this year. With inflation below target and growth slightly below trend, the report said there remains room for further rate cuts.
India’s growth momentum has accelerated in recent months: GDP surged 8.2 percent in the second quarter of FY26, prompting many economists to raise their full-year forecasts to above 7 percent.
Globally, the OECD said economic activity has remained resilient but underlying vulnerabilities persist. It projects world GDP growth slowing from 3.2 percent in 2025 to 2.9 percent in 2026, before rising to 3.1 percent in 2027.
U.S. GDP growth is expected to ease from 2.0 percent in 2025 to 1.7 percent in 2026 and 1.9 percent in 2027. The Euro area is forecast to grow 1.3 percent in 2025, 1.2 percent in 2026 and 1.4 percent in 2027. China’s economy is projected to slow from 5.0 percent in 2025 to 4.4 percent in 2026 and 4.3 percent in 2027. (Source: IANS)
