India’s Economy to Grow by 6.3% in 2025, 6.4% in 2026 Despite Global Slowdown: OECD

New Delhi: India is set to maintain strong economic momentum despite a slowing global economy, according to the OECD’s latest Economic Outlook released on Tuesday. The report forecasts India’s GDP growth at 6.3% in 2025 and 6.4% in 2026.

The Organisation for Economic Co-operation and Development (OECD) attributed India's resilience to strong domestic demand, robust performance in the services and manufacturing sectors, and continued investment in infrastructure.

However, the report warned that external risks—especially trade tensions and global economic uncertainty—could impact India's export-oriented industries.

In contrast, China’s economic growth is projected to slow from 5.0% in 2024 to 4.7% in 2025 and further to 4.3% in 2026.

Globally, economic growth is expected to decelerate from 3.3% in 2024 to 2.9% in both 2025 and 2026. The slowdown is likely to be most pronounced in the United States, Canada, Mexico, and China, with more moderate declines in other major economies.

In the U.S., GDP growth is forecast to drop from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026.

Inflation remains a concern in several countries. Rising trade costs—driven by increased tariffs—are expected to fuel inflationary pressures, although falling commodity prices could help ease the impact. For G20 nations, annual headline inflation is projected to fall from 6.2% in 2024 to 3.6% in 2025 and 3.2% in 2026.

“The global economy has shifted from a phase of resilient growth and easing inflation to a more uncertain path,” said OECD Secretary-General Mathias Cormann.

He stressed the need for international cooperation, saying, “Governments must work together to resolve global trade challenges through dialogue, maintaining open markets and safeguarding the benefits of rules-based global trade—such as competition, innovation, efficiency, and long-term growth.”

The report also highlighted potential upside scenarios: the removal of recent trade barriers could boost global growth and help lower inflation. A peaceful resolution to the war in Ukraine and conflicts in the Middle East would also improve investor confidence and promote economic stability.

On monetary policy, the OECD advised central banks to stay alert, as rising trade costs could lead to broader wage and price pressures. If inflation expectations remain stable and trade tensions ease, interest rate cuts should continue in economies where inflation is declining and demand growth remains weak.

With inputs from IANS