Will India's GDP Grow by 6.7% to 7% Through 2027?
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Synopsis
India's economic forecast indicates a growth trajectory of 6.7% in 2026 and 7% in 2027, driven by consumer spending and a supportive global environment. Discover how emerging markets are set to lead global economic growth amidst evolving challenges.
Key Takeaways
- India's GDP growth: 6.7% in 2026, 7% in 2027.
- Global economic growth: Projected at 3.2% in 2026 and 2027.
- Emerging markets: Expected to lead global growth, contributing two-thirds of GDP growth.
- AI investment: A key driver but may lead to overinvestment risks.
- Stable inflation: Supported by favorable energy and food prices.
New Delhi, Dec 4 (NationPress) India's gross domestic product (GDP) is anticipated to expand by 6.7% in 2026, followed by 7% in 2027 and 6.8% in 2028, according to a report released on Thursday.
The report from S&P Global Ratings indicated that decreasing inflation and strong labor markets are likely to continue bolstering consumer spending across many developed economies, predicting a steady global economic growth of 3.2% in both 2026 and 2027.
As growth decelerates in both the United States and China, the eurozone is on the path to recovery while emerging markets (EMs) maintain their robust performance.
The ratings agency noted a positive shift in the global macroeconomic landscape, attributed to better-than-expected outcomes regarding US tariffs, with effective rates being lower than anticipated.
Furthermore, the uncertainty surrounding these tariffs has diminished, highlighted by a thawing of relations between the US and China, the report stated.
It projected that emerging markets will be the main drivers of global economic growth in 2026, contributing approximately two-thirds of the total global GDP growth, with EM growth estimated at 4.4% compared to 1.5% for advanced economies.
The delayed impact of tariffs on American consumers suggests that US companies are absorbing the heightened costs, which leads to reduced profit margins.
In addition, there are favorable conditions for growth, including a surge in AI investments (especially in the US), supportive financial conditions, and lower oil prices.
However, the report cautions that the increasing reliance on AI's transformative potential is driving market valuations and investment volumes globally, which could result in overinvestment in data center infrastructures and future strain on credit conditions.
“We predict that strong domestic demand will account for around 75% of real GDP growth in emerging markets in 2026. This is further endorsed by relatively stable inflation, supported by a weak US dollar along with favorable energy and food prices,” the report concluded.
IANS
aar/pk
Point of View
It's essential to recognize that India’s projected GDP growth reflects a resilient economy poised to withstand global challenges. The positive indicators from emerging markets, coupled with consumer spending and favorable conditions, suggest a promising outlook. However, caution is warranted regarding overreliance on AI and potential market fluctuations.
NationPress
04/12/2025
Frequently Asked Questions
What is the projected GDP growth for India in 2027?
India's GDP is projected to grow by 7% in 2027.
What factors are contributing to India's GDP growth?
Lower inflation and robust labor markets are key factors supporting consumer spending and GDP growth.
How does India's GDP growth compare to global growth?
India's GDP growth is significantly higher than the global growth forecast of 3.2%.
What role do emerging markets play in global growth?
Emerging markets are expected to contribute about two-thirds of global GDP growth, highlighting their crucial role.
What are the potential risks mentioned in the report?
The report cautions about possible overinvestment in data centers and the transformative power of AI driving market valuations.
