OECD Projects India’s GDP Growth to Moderate to 6.3% in FY26.
Economy Business
In June 2025, the Organisation for Economic Co-operation and Development (OECD), headquartered in Paris, France, released its Economic Outlook 2025 Issue 1 titled "Tackling Uncertainty, Reviving Growth." The report projects India’s GDP growth for the Financial Year 2025-26 (FY26) at 6.3%, marking a downward revision of 0.10% from its March 2025 forecast.
- For FY27, the OECD has further revised India’s GDP growth forecast downward by 0.6 percentage points, projecting a growth rate of 6.4%.
- This report was published during an informal World Trade Organization (WTO) Ministerial-level meeting in Paris, attended by delegations from member states and partner countries, including India.
- India’s GDP growth projection is supported by strong private consumption driven by rising real incomes, recent tax relief measures, and an improving labor market. Investment is expected to benefit from falling interest rates and increased public capital expenditure, although rising US tariffs may weigh on export performance.
Main Point :- (i) Despite global uncertainties, India is expected to maintain its status as the fastest-growing economy among G20 countries.
(ii) Headline inflation is forecasted to average 4.1% in FY26 and 4.0% in FY27.
(iii) Inflation expectations remain well anchored, with wage pressures expected to stay contained. The economy is projected to grow close to its potential, indicating limited demand-driven inflationary pressures.
About Organisation for Economic Co-operation and Development (OECD)
Secretary-General : Mathias Cormann
Headquarters : Paris, France
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