India likely to remain fastest growing economy in next two years: OECD
The Organisation for Economic Co-operation and Development (OECD) in its latest report has said that India is likely to remain the fastest-growing major economy over the next two years with the GDP growth rate projected at 6.4 per cent for 2025 and at 6.6 per cent in 2026. The OECD’s projections are more or less in line with the RBI’s forecast of India’s growth prospects where the central bank has kept the growth forecast at 6.7 per cent for FY26, while the Economic Survey pegged growth between 6.3 per cent and 6.8 per cent for FY26. Meanwhile, OECD estimates China to grow at 4.8 per cent in 2025 and 4.4 per cent in 2026.
About global economy growth prospect, OECD has said that the global economy has shown some real resilience, with growth remaining steady and inflation moving downwards. However, it has warned about some emerging signs of weakness in the global economy, driven by heightened policy uncertainty. It added that increasing trade restrictions will contribute to higher costs both for production and consumption. It has emphasized the necessity to ensure a well-functioning, rules-based international trading system and to keep markets open. The report noted global GDP growth likely to moderate from 3.2 per cent in 2024 to 3.1 per cent in 2025 and 3.0 per cent in 2026, with higher trade barriers in several G20 economies and increased policy uncertainty weighing on investment and household spending. It expects United States’ annual real GDP growth to slow from its very strong recent pace, to 2.2 per cent in 2025 and 1.6 per cent in 2026. Meanwhile, it has projected Euro area's real GDP growth at 1.0 per cent in 2025 and 1.2 per cent in 2026, as heightened uncertainty keeps growth subdued.
OECD in its report has stated that the global economy remained resilient in 2024, expanding at a solid annualized pace of 3.2 per cent through the second half of the year. However, recent activity indicators such as weakening business and consumer sentiments and rising inflationary pressure points towards softening of global growth prospects. It also added that the Higher-than-expected inflation would prompt more restrictive monetary policy and could give rise to disruptive repricing in financial markets, however, countries softening tariff policies could fuel stronger growth.
