India's Economic Forecast Amid Global Challenges

The OECD forecasts India's GDP growth at 7.6% this fiscal, slowing to 6.1% by 2026-27. Challenges include global energy price surges and Middle East conflicts. India may temporarily raise policy rates in 2026 due to inflation. Global GDP growth is expected to ease to 2.9% in 2026.

The Organisation for Economic Cooperation and Development (OECD) has projected India's GDP growth at an impressive 7.6% for the current fiscal year, according to its interim Economic Outlook report. However, a slowdown is expected with growth easing to 6.1% by 2026-27.

The report highlights the ongoing conflict in the Middle East as a factor contributing both human and economic costs to the nations directly affected. This situation is challenging the global economy's resilience by causing energy infrastructure disruptions and a significant surge in energy prices.

India may also face inflationary pressures leading to a temporary increase in policy rates in the second quarter of 2026. Meanwhile, the fading deflationary impact of past food and energy price-reducing shocks is also expected to contribute to rising inflation rates.