India to Grow Faster Than China in 2027, Goldman Sachs Projects 7.2% Expansion

New Delhi: India is expected to outpace China in economic growth in 2027, with its GDP projected to expand by 7.2 per cent, according to a new report by Goldman Sachs Research. The forecast places India among the world's fastest-growing major economies, despite a moderation from the estimated 7.9 per cent growth in 2026.

The investment bank's projections are also more optimistic than market expectations, with the consensus estimate for India's economic growth standing at 6.8 per cent for 2027.

According to the report, the global economy is expected to grow by 2.8 per cent in 2027, slightly higher than the estimated 2.7 per cent expansion in 2026. Lower energy prices and continued investment in artificial intelligence (AI) are likely to support economic activity, helping offset the impact of tighter financial conditions.

Goldman Sachs Chief Economist and Head of Research Jan Hatzius said the global economic outlook reflected shifting growth drivers, particularly energy costs, technology investments and fiscal policy.

"We expect another year of solid but unremarkable GDP growth in 2027," Hatzius said.

China's economy, meanwhile, is projected to expand by 4.5 per cent in 2027, marginally above the market consensus estimate of 4.4 per cent. The country's export performance is expected to support growth, although weak domestic consumption and continuing difficulties in the property sector remain key challenges.

The report also expects the United States, Japan and the United Kingdom to register economic growth above market consensus forecasts. South Korea and Taiwan are likely to benefit from sustained global demand for AI-related exports.

Lower energy costs are expected to provide additional support to the global economy in 2027, reversing some of the pressure that high energy prices exerted on growth in 2026. Goldman Sachs commodity strategists anticipate Brent crude prices falling to $78 per barrel by the end of 2027, alongside a moderation in global liquefied natural gas (LNG) prices.

The projection takes into account a continued adjustment in energy supplies from the Middle East. However, Europe could continue to face pressure from relatively high energy costs as the impact of earlier price increases gradually passes through to consumers.

AI-related spending is expected to emerge as another important driver of global economic expansion. Investment in the sector, measured in nominal terms, is projected to rise to $1.8 trillion in 2027 from $1.1 trillion in 2026, largely driven by increased hardware spending in the United States.

US hardware investment alone is expected to increase by more than $500 billion. Goldman Sachs estimates that AI-related investments will contribute 0.4 percentage points to global GDP growth in 2027.

In the United States, the contribution of AI investment to underlying GDP growth is projected at 0.6 percentage points after accounting for the statistical undercounting of semiconductor investments and related intellectual property exports.

However, the pace of AI investment growth is expected to moderate, with the strongest year-on-year expansion likely to occur during the first half of 2027.

The projections underline India's relatively strong growth outlook at a time when the global economy is expected to expand at a modest pace, although the country's growth rate is also forecast to ease slightly from its 2026 level.

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