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India's Growth Steady: OECD Forecasts Unchanged
4 Dec
Summary
- OECD maintains India's FY26 growth forecast at 6.7%.
- Monetary policy easing and public capex support growth.
- Higher US tariffs pose a risk to India's export growth.
The Organisation for Economic Co-operation and Development (OECD) has projected India's economic growth to remain steady, keeping its forecast for FY26 unchanged at 6.7%. This projection is supported by anticipated monetary policy easing and continued public capital expenditure. The OECD's outlook for FY27 also remains constant at 6.2%.
However, the economic outlook is not without potential challenges. The OECD has highlighted that the imposition of higher tariffs by the United States could potentially dampen India's export growth. This warning suggests a need for vigilance in trade relations and export strategies.
In a separate positive note, the OECD has revised its retail inflation forecast downwards. For the current financial year, inflation is now projected at 1.9%, a reduction of 100 basis points. For FY27, the inflation forecast has been lowered by 50 basis points to 3.4%.
