Organisation for Economic Cooperation and Development (OECD) Projects India GDP Growth at 7.6% for FY26

Key facts

• The Organisation for Economic Cooperation and Development (OECD) projected India’s economy to expand by 7.6% in the fiscal year (FY) 2025-26.
• The OECD expects India's growth to moderate to 6.1% in FY 2026-27 and reach 6.4% in FY 2027-28.
• Inflation in India is projected to rise from 2% in FY 2025-26 to 5.1% in FY 2026-27, then ease to 4.1% in FY 2027-28.
• The OECD indicated that India might need to raise policy rates temporarily in the second quarter of 2026 to manage inflationary pressures.
• Global economic growth is forecast to soften to 2.9% in 2026 and improve slightly to 3% in 2027.
• The report highlighted that United States (US) bilateral tariff rates for several emerging economies, including India, have declined following a US Supreme Court ruling against levies under the International Emergency Economic Powers Act.
• The OECD warned that disruption of shipments through the Strait of Hormuz and damage to energy infrastructure have triggered a surge in energy prices and affected the global supply of commodities.
• Gas rationing and the fading of fiscal support were identified as factors that could contribute to the easing of India's growth from the 7.6% projected for FY 2025-26.