India is expected to grow by 7.4 per cent in the current financial year, driven by consumption and public investment, the United Nations Department of Economic and Social Affairs (UNDESA) said in a report. The World Economic Situation and Prospects 2026 report also predicts that India will grow at 6.6 per cent in the 2026-27 financial year and 6.8 per cent in the 2027-28 financial year.

 

The report said that recent tax reforms and monetary easing will provide additional near-term support. According to the UN’s report, several large developing economies, including India and Indonesia, are expected to continue experiencing solid growth driven by resilient domestic demand or targeted policy measures. 

 

The report also highlighted that the global economy has shown resilience, but the outlook remains clouded by trade tensions, fiscal strains and persistent uncertainty. While domestic demand and policy easing are supporting activity in the United States and parts of Asia, growth remains weak in Europe, and high debt and climate shocks continue to constrain many developing economies.

 

Global headline inflation is projected to fall to 3.1 per cent in 2026 from 3.4 per cent in 2025. However, high prices continue to erode real incomes, particularly for low-income households, with food, energy and housing costs remaining a major source of pressure and inequality.