India Growth Forecast Raised to 7.1% by OECD

The India growth forecast for FY27 was raised to 7.1% by the OECD on Wednesday, marking the largest upgrade in its latest outlook. The OECD lifted India’s projection by 80 basis points, putting it above forecasts from Fitch Ratings, S&P Global, Moody’s and the RBI.

The OECD also raised its 2026 global GDP growth forecast to 2.9%, with higher projections for the United States, eurozone, Japan and the United Kingdom despite elevated energy prices. It said the global outlook remains heavily dependent on the resolution of the Middle East conflict.

OECD Raises India and Global Growth Outlook

The OECD’s 2027 G20 inflation forecast was increased to 3.6% from 3.1%, citing the impact of the Middle East energy shock. The organisation also raised inflation forecasts for nearly every G20 economy except China and Saudi Arabia and warned that higher price pressures could lead central banks including the Fed and BOJ to raise rates.

The OECD expects global growth at 3.0% in 2027, while saying AI-related investment supported the 2026 outlook. Europe remains under pressure, with eurozone growth projected at 1.0% and natural gas storage at 15-year lows heading into winter.

ADB Also Upgrades India’s FY27 Forecast

The Asian Development Bank raised India’s FY27 growth projection to 7.0%, up from 6.6% previously and 0.4 percentage points above its July forecast. The upgrade was linked to strong investment and consumption, as well as India’s 7.8% first-quarter GDP expansion.

The ADB also raised its 2026 growth forecast for Taiwan by 1.5 percentage points to 11%, supported by technology exports that increased 65% in the first half of the year. Vietnam’s forecast was raised to 7.8% and Malaysia’s to 4.9%.

However, the ADB lowered its Philippines growth forecast to 3.3% from 3.8%. ADB President Masato Kanda warned that a strengthening El Niño and prolonged Middle East conflict pose growing risks to the region.

Rating Agencies Also Raise India Growth Forecasts

S&P Global raised India’s FY27 growth forecast to 7% from 6.6%, while Fitch increased its estimate to 6.9% from 6.4%. Moody’s had raised its FY27 forecast to 7% last week.

S&P and Fitch both expect the RBI to increase the repo rate by 25 basis points, with Fitch expecting a possible move as early as October. The source material also notes that headline inflation has risen to 4.8%.

The ADB expects developing Asia Pacific inflation at 4.2% in 2026 and 3.5% in 2027, compared with 3% in 2025. It attributed the higher inflation outlook to disrupted energy and grain supplies, conflicts in the Middle East and Ukraine, and El Niño related harvest risks.