Stories
OECD Boosts India's FY27 GDP Growth Forecast to 7.1% on Strong Domestic Demand
- •The Organisation for Economic Co-operation and Development (OECD) increased India's GDP growth projection for FY27 by 80 basis points to 7.1%.
- •This upward revision is attributed to resilient domestic demand and government policies that shielded households and firms from higher energy prices.
- •OECD noted that growth in several G20 emerging market economies, including India, was underpinned by these factors.
- •Despite recent momentum, reduced purchasing power is expected to temper India's growth in the latter half of this year before a gradual recovery in 2027.
- •OECD's 7.1% GDP growth projection for FY27 is the highest among other international agencies, with inflation projected to average 4.7% in 2026.
Key Questions Answered
The OECD has raised India's GDP growth projection for the current fiscal year by 80 basis points to 7.1 per cent, citing resilient domestic demand and government policies supporting households and firms against higher energy prices.
The OECD's 7.1 per cent growth projection for FY27 is the highest among international organizations. Other institutions like the Asian Development Bank, S&P, and Moody's estimate a 7 per cent expansion, while Fitch Ratings projects 6.9 per cent and the Reserve Bank of India estimates 6.7 per cent.
India's growth is underpinned by resilient domestic demand and government price support measures cushioning energy price pressures. However, global economic prospects and baseline projections remain heavily dependent on achieving a durable resolution to the Middle East conflict.
