Goldman Sachs projects India's economy will expand by 7.2 per cent in 2027, outpacing China's forecast growth of 4.5 per cent and beating the market consensus estimate of 6.8 per cent, according to the investment bank's latest global outlook report. The forecast places India among the fastest-growing major economies in the world for the year ahead.

India's Growth Outlook

India's projected 7.2 per cent expansion in 2027, while a moderation from the estimated 7.9 per cent growth in 2026, remains well above both the global average and emerging-market peers. Goldman Sachs's forecast for India exceeds the consensus by 0.4 percentage points, signalling that the bank sees structural momentum that the broader analyst community may be underweighting.

China, by contrast, is expected to grow 4.5 per cent in 2027 — only marginally above the consensus of 4.4 per cent. Exports are projected to support Chinese growth, but subdued domestic consumption and persistent challenges in the property sector continue to weigh on the outlook.

Global Economy: Solid but Unremarkable

The global economy is projected to grow 2.8 per cent in 2027, slightly ahead of the estimated 2.7 per cent expansion in 2026. Goldman Sachs Chief Economist and Head of Research Jan Hatzius characterised the year as one of steady but unspectacular momentum. 'We expect another year of solid but unremarkable GDP growth in 2027,' Hatzius said.

The investment bank expects the United States, Japan, and the United Kingdom to record growth above market consensus estimates. South Korea and Taiwan are also expected to benefit from sustained global demand for AI-related exports.

Energy Prices and AI Investment as Key Drivers

Two major forces are expected to shape global growth in 2027: easing energy prices and accelerating artificial intelligence (AI) investments. Goldman Sachs commodity strategists forecast Brent crude prices to decline to $78 per barrel by the end of 2027, alongside a moderation in global liquefied natural gas (LNG) prices. Lower energy costs are expected to partially offset the drag they exerted on growth in 2026, though Europe is likely to face lingering pressure as earlier price increases continue to feed through to consumers.

On the technology side, nominal investment in AI is projected to surge to $1.8 trillion in 2027, up from $1.1 trillion in 2026, driven largely by higher hardware spending in the United States. Goldman Sachs estimates that AI investments will contribute 0.4 percentage points to global GDP growth in 2027. In the US specifically, the contribution is projected at 0.6 percentage points, after accounting for the statistical undercounting of semiconductor investments and related intellectual property exports. However, the pace of AI investment growth is expected to moderate, with the strongest year-on-year expansion likely concentrated in the first half of 2027.

What This Means for Emerging Markets

The Goldman Sachs report underscores a widening divergence between India and China — a trend that has been building for several years. India's demographic dividend, domestic consumption resilience, and ongoing capital expenditure cycle are cited as structural tailwinds, even as global financial conditions remain relatively tight. This comes amid sustained foreign institutional interest in Indian equities and a continued push on infrastructure spending by the Centre.

The report's findings will likely inform portfolio allocation decisions by global investors navigating a world in which the two largest emerging markets are on markedly different growth trajectories. How India sustains this momentum — particularly if global trade conditions deteriorate — will be closely watched in the months ahead.