OECD upgrades India’s FY27 GDP outlook to 7.1 percent

The OECD’s latest economic Outlook shows a stronger than anticipated trajectory for India’s GDP in fiscal year 2027, with the growth rate now forecast at 7.1 percent, a rise of 80 basis points from the 6.3 percent estimate issued in June. The upgrade reflects resilient internal demand and a series of governmental interventions that have softened the impact of high energy prices on the Indian economy.

The same report also nudged the FY28 projection upward to 6.5 percent, up from 6.4 percent previously. Nevertheless, analysts warn that a dip in real purchasing power could temper growth in the latter half of the current year, with a gradual recovery expected in 2027.

Consumer price inflation is projected to fall from 4.7 percent in 2026 to 4.2 percent in 2027. The OECD anticipates that, as a short‑term measure, emerging market economies such as India may raise policy interest rates to counter lingering inflationary pressures.

OECD Secretary‑General Matthias Cormann said that while global growth remains above expectations, the protective mechanisms that have helped absorb the energy shock are eroding. He urged governments to focus assistance where it is most needed, keep public spending on a sustainable footing, and bolster long‑term growth through robust skill development, diversified energy supplies and swift AI adoption.

Globally, the OECD forecasts world economic growth of 2.9 percent in 2026 and 3.0 percent in 2027. The outlook remains vulnerable to the unresolved Middle‑East conflict, which could introduce material risks. The United States is expected to post a 2.2 percent growth rate in 2026, declining to 2.1 percent the following year. The euro area is projected to stay at a modest 1 percent growth for both years, while China’s growth is forecast at 4.5 percent in 2026 and 4.2 percent in 2027.