Suspense Crime, Digital Desk : Despite global uncertainties, India's economic growth will be 6.3 per cent in FY2027 and 6.4 per cent in FY2028, Organisation for Economic Co-operation and Development (OECD) said in a report. China's growth rate is expected... Read more.Amid global uncertainties, India's economic growth will be 6.3 per cent in FY2027 and 6.4 per cent in FY2028, Organisation for Economic Co-operation and Development (OECD) said in a report. China's growth rate could decelerate-by 5 percent in 2025, 4.5 percent in 2026, and 4.3 percent in 2027. What the report said The energy sensitivities and pressure from the real estate market are causing this. However, the increase in renewable energy component of the energy mix, ample oil stocks, and a cap on the gasoline prices are reducing this pressure to some extent. "The escalating conflict in the Middle East has emerged as a key factor shaping the global economic outlook. Prices for energy and other key goods produced in the Persian Gulf region and used in the agricultural and industrial sectors have risen steeply since February following decreases in output and exports. These trends are raising inflationary pressures, thereby affecting real incomes and growth, lowering estimates for GDP growth and pushing inflation expectations upward." It mentioned that the overall interest rate for lending decreased since the Reserve Bank of India has slashed the monetary policy rate from 6.5 percent in January 2025 to around 5.25 percent, which is quite stable, in February 2026. There was a 15.9% rise year on year in credit for the non-food sector in March. However, it stated that certain developments point towards a rise in the inflationary pressures. Core inflation is up by the recent hike in food prices after the favourable effect of base year expired. OECD's view on inflation "A moderate temporary increase of about 25 basis points is forecast for the policy rate toward the end of the first quarter of FY2026-27 to maintain inflation within the target range of 4% and keep inflation expectations anchored," said the OECD report. Additionally, the OECD report stated that the fiscal deficit for FY2026-27 was planned to reach 4.3% of GDP from 4.4% in FY2025-26. However, the measures that will be adopted to counter sharp volatility in the energy sector are expected to increase the deficit by about 0.4% of GDP from the budget target.
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