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India will remain the world’s fastest-growing major economy over the next three years, with the Organisation for Economic Cooperation and Development (OECD) projecting GDP growth of 7.6 per cent in 2025-26, 6.1 per cent in 2026-27 and 6.4 per cent in 2027-28.
In its interim Economic Outlook report, the OECD said the conflict in the Middle East is testing the resilience of the global economy by disrupting energy supplies and pushing up prices.
The report said the suspension of shipments through the Strait of Hormuz, along with the closure and damage of some energy infrastructure, has driven up energy prices and disrupted the global supply of energy and key commodities, including fertilisers. The resulting increase in costs is weakening demand and adding to inflationary pressures.
China’s economic growth is expected to slow from 5.0 per cent in 2025 to 4.4 per cent in 2026 and 4.3 per cent in 2027. The OECD attributed the slowdown to the expiry of government consumer subsidies, higher energy import prices, continued adjustments in the real estate sector and anti-involution measures that are expected to dampen investment growth.
Globally, GDP growth is projected to remain broadly stable at 2.9 per cent in 2026 before edging up to 3.0 per cent in 2027, supported by strong technology-related investment and gradually lower effective tariff rates.
However, the OECD warned that the evolving conflict in the Middle East continues to pose significant risks to global growth by increasing uncertainty over demand and trade. The projections assume that the current disruption in energy markets will be temporary, with prices beginning to ease from the middle of 2026.