New Delhi, March 26 (NationPress): The Organisation for Economic Cooperation and Development (OECD) has forecasted India's GDP growth at 7.6 per cent for the fiscal year 2025-26, followed by 6.1 per cent in 2026-27 and 6.4 per cent in 2027-28, confirming India's position as the world's fastest-growing major economy.

The OECD's interim Economic Outlook report highlights that ongoing conflicts in the Middle East are testing the resilience of the global economy. Disruptions in shipments through the Strait of Hormuz and damage to energy infrastructure have caused energy prices to soar, impacting global supply chains for essential commodities such as fertilizers. This situation has resulted in increased costs, negatively affecting demand and contributing to inflationary pressures.

According to the report, China's growth rate is projected to decline from 5.0 per cent in 2025 to 4.4 per cent in 2026 and further to 4.3 per cent in 2027. This decline is attributed to the winding down of government subsidies for consumers, rising energy import costs, ongoing adjustments in the real estate sector, and weakening investment growth due to anti-involution measures.

The report indicates a significant variation in the effective tariffs imposed by the United States across different economies, highlighting reductions for several emerging markets, including Brazil, China, India, and Indonesia.

In terms of inflation, emerging market economies are expected to see an uptick from 4.1 per cent in 2025 to 4.4 per cent in 2026, before decreasing to 3.3 per cent in 2027.

In India, the diminishing deflationary effects from previous food and energy price shocks are likely to be intensified by the recent rise in global energy prices. Consequently, inflation is expected to rise from 2 per cent in FY 2025-26 to 5.1 per cent in FY 2026-27 and 4.1 per cent in FY 2027-28, as mentioned in the report.

Among emerging markets, India's central bank is anticipated to temporarily raise policy rates in the second quarter of 2026 to counteract mounting inflationary pressures.

Global GDP growth is expected to remain relatively stable at 2.9 per cent in 2026, before increasing to 3 per cent in 2027, driven by strong technology-related investments and gradually declining effective tariff rates. Nevertheless, the ongoing conflict in the Middle East poses risks to growth and contributes to significant uncertainty regarding global demand. The projections assume that current disruptions in the energy market are temporary, with prices expected to ease by mid-2026.

However, the report warns that any prolonged disruption of shipments through the Strait of Hormuz or sustained closures of oil and gas facilities could result in significantly adverse outcomes.

To reduce dependence on imported fossil fuels and enhance energy efficiency, measures such as expanding clean energy capacity, upgrading electricity grids, and streamlining permitting processes are recommended. These steps could mitigate exposure to geopolitical shocks, alleviate cost pressures for households and businesses, and bolster long-term resilience.