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Informist, Wednesday, Sept. 23, 2026

 

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--OECD raises India FY27 GDP growth forecast by 80 bps to 7.1%
--OECD raises India FY28 GDP growth by 10 bps to 6.5%
--OECD: Sees headline inflation averaging 4.7% in FY27, 4.2% in FY28 
--OECD: Sees core inflation averaging 4.1% in FY27, FY28
--OECD: Resilient demand, India policies cushion econ from high energy cost
--OECD: Government measures to mitigate energy price pressures in near term
--OECD: RBI may hike repo rate temporarily to offset inflationary pressures
--OECD: Reduced purchasing power to weaken India growth in 2nd half of 2026

 

NEW DELHI – The Organisation for Economic Co-operation and Development Wednesday raised its forecast for India's GDP growth in 2026-27 (Apr-Mar) and FY28 by 80 basis points and 10 bps, respectively, considering the better than expected economic expansion in the June quarter and supportive government measures.

 

The organisation has projected India's GDP growth in the current financial year at 7.1%, 40 basis points higher than the Reserve Bank of India's latest forecast of 6.7%. OECD expects the growth to ease to 6.5% in FY28. Earlier, the organisation had estimated the economy growing 6.3% and 6.4% in FY27 and FY28, respectively.

 

India's economy expanded 7.8% in the June quarter and in FY26, based on the new GDP series with FY23 as the base year.

 

Recently, the World Economic Forum projected India's FY27 growth at 6.7%, while S&P Global Ratings and Moody's estimated it at 7.0%. 

 

Growth in several G20 emerging market economies such as India, Indonesia and Brazil was underpinned by "resilient domestic demand and government policies that cushioned households and firms from the impact of higher energy prices," the organisation said in its interim economic outlook for September.

 

These projections see risks amid a below-normal monsoon, which could weaken growth and push inflation higher. According to the India Meteorological Department, India has received 706.9 millimetres of rain during Jun. 1–Sept. 22, 15?low the normal of 832.4 millimetres for the period.  

 

India's headline inflation is seen averaging 4.7% in FY27, 10 bps lower than OECD's June estimates. The organisation also revised India's CPI inflation estimate by 20 bps to average 4.2% for FY28, according to the 'Weathering Successive Shocks' report. Core inflation is expected to average 4.1% in FY27 and FY28, according to OECD. In August, retail inflation rose to a 20-month high of 4.82% from 4.45% in July.

 

In some emerging market economies such as India, Indonesia and Mexico, "government price support measures are mitigating energy price pressures," OECD said. These measures will "continue to do so in the near term," it added.

 

Despite strong momentum, India's growth is expected to weaken through the second half of this year on reduced purchasing power, the report said. However, the organisation sees the Indian economy recovering gradually in 2027.  

 

On the policy side, India is among the emerging market economies to see a repo rate hike. The country is "projected to raise policy rates temporarily to help offset stronger inflationary pressures," OECD said, without sharing further details on the repo rate hike. The RBI's Monetary Policy Committee will meet next on Oct. 5-7. The rate-setting panel had left the repo rate unchanged at 5.25% in August.  End

 

Reported by Shweta

Edited by Avishek Dutta

 

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