Is India’s Economy Set to Grow by 6.3% in 2025 and 6.4% in 2026 Despite Global Slowdown?

New Delhi, June 3 (NationPress) India is successfully resisting the global economic slowdown, as highlighted in the OECD's recent 'Economic Outlook' released on Tuesday. The report forecasts that the Indian economy will expand by 6.3 percent in 2025 and 6.4 percent in 2026.

Key factors contributing to India's robust performance amidst global instability include strong domestic demand, a resilient services and manufacturing sector, and ongoing infrastructure spending.

However, the report warns of external threats, particularly from global trade tensions, which could adversely affect export-driven industries.

In contrast, China is experiencing a downturn, with growth expected to decline from 5.0 percent in 2024 to 4.7 percent in 2025 and 4.3 percent in 2026.

The OECD anticipates a global growth dip from 3.3 percent in 2024 to 2.9 percent in both 2025 and 2026.

According to the report, the most significant slowdowns are expected in the United States, Canada, Mexico, and China, with smaller declines in other economies.

The GDP growth rate in the United States is projected to decrease from 2.8 percent in 2024 to 1.6 percent in 2025 and 1.5 percent in 2026.

Inflationary pressures have resurfaced in several economies. Increased trade costs in countries that raise tariffs are anticipated to further elevate inflation, although this effect may be partially countered by falling commodity prices.

Annual headline inflation across G20 nations is projected to decrease from 6.2 percent to 3.6 percent in 2025 and 3.2 percent in 2026.

OECD Secretary-General Mathias Cormann stated, “The global economy has shifted from a phase of steady growth and declining inflation to a path filled with uncertainties.”

Cormann stressed the importance of governments collaborating to address issues within the global trading system through constructive dialogue, advocating for open markets and preserving the economic advantages derived from a rules-based global trade.

On a positive note, undoing recent trade barriers could enhance global growth and mitigate inflation. A peaceful resolution to the conflict in Ukraine and ongoing tensions in the Middle East could also foster greater confidence and investment opportunities.

The report advised central banks to remain alert, given the heightened uncertainties and the potential for increased trade costs to drive up wage and price pressures.

If inflation expectations stay well-managed and trade tensions do not escalate further, it is recommended that policy rate reductions continue in economies where inflation is expected to ease and aggregate demand growth remains sluggish.