New Delhi, Jan 9 (NationPress) A recent report by the United Nations (UN) indicates that India’s GDP growth is projected to reach 6.6 percent in 2026 and 6.7 percent in 2027, bolstered by strong public investment and resilient consumption, which are expected to mitigate the negative effects of increased tariffs from the United States.

The 'World Economic Situation and Prospects 2026’ report highlights that recent tax reforms and monetary easing will also provide additional support in the near term.

The UN report mentions that several major developing economies, including China, India, and Indonesia, are likely to maintain solid growth driven by strong domestic demand or specific policy measures.

While the outlook for South Asia appears relatively strong, growth is anticipated to moderate from an estimated 5.9 percent in 2025 to 5.6 percent in 2026, before rebounding to 5.9 percent in 2027.

The report further notes that although the global economy has shown resilience, the outlook is clouded by trade tensions, fiscal strains, and persistent uncertainty.

It states, “Growth is expected to slow to 2.7 percent in 2026, falling below both 2025 levels and the pre-pandemic average, due to subdued investment and structural challenges, despite easing inflation and monetary loosening.”

While domestic demand and policy easing are sustaining activity in the United States and parts of Asia, growth remains sluggish in Europe, with high debt levels and climate shocks continuing to impede many developing economies.

According to the report, global trade performed better than expected in 2025, buoyed by early shipments ahead of higher tariffs and robust services exports. However, a slowdown in growth is projected for 2026 as temporary drivers diminish and trade barriers along with policy uncertainty linger. Investment remains low across most regions.

Global headline inflation is expected to decrease to 3.1 percent in 2026 from 3.4 percent in 2025. Nevertheless, high prices continue to affect real incomes, particularly for low-income households, as food, energy, and housing costs remain significant sources of pressure and inequality.

The report emphasizes that “monetary policy alone cannot control persistent price pressures. An improved alignment between monetary, fiscal, and industrial policies is crucial to stabilize inflation, support investment, and protect vulnerable groups. Targeted and temporary measures can help shield households from high prices and promote social cohesion, while credible medium-term fiscal plans and prudent debt management are vital for rebuilding fiscal space.”