India to Grow at 6.3% in 2025, Outpacing Global Slowdown: OECD Economic Outlook
Chennai, June 3 (The Trending People): In a world increasingly weighed down by economic uncertainty, India is standing out as a global growth leader, according to the latest OECD Economic Outlook released Tuesday.
The report forecasts that India’s economy will grow by 6.3% in 2025 and 6.4% in 2026, buoyed by strong domestic demand, a resilient services and manufacturing base, and sustained infrastructure investment.
“India continues to defy the global slowdown,” the Organisation for Economic Co-operation and Development (OECD) stated in its semi-annual global forecast.
Global Growth Slows, But India Accelerates
While India maintains its upward trajectory, the global economy is set to slow from 3.3% in 2024 to 2.9% in 2025 and 2026, the report noted.
The slowdown is expected to be sharpest in:
- United States
- Canada
- Mexico
- China
China's growth is projected to dip from 5.0% in 2024 to 4.7% in 2025 and 4.3% in 2026, as it faces challenges ranging from property sector instability to weak external demand.
By contrast, India is expected to outperform not only its BRICS counterparts but also all major G20 economies, remaining a key driver of global growth.
OECD Flags Risks: Trade Frictions Could Impact India
Despite the optimism, the OECD warned of external risks, especially from rising trade protectionism. These could spill over into export-heavy segments of India's economy, including IT services and manufacturing supply chains.
“Trade frictions could weigh on global investment and reduce demand for exports,” the report cautioned.
Global Trade Tensions Fuel Inflation
Inflation, another key risk, has resurfaced in several economies due to rising trade costs and geopolitical uncertainties. While commodity prices are expected to ease, tariff hikes in key countries could partially offset this.
Headline inflation in G20 nations is projected to decline from 6.2% in 2024 to 3.6% in 2025 and 3.2% in 2026, provided no new shocks emerge.
In countries like the US, inflation remains stubborn, complicating interest rate decisions by central banks already walking a tightrope between growth and price stability.
Cormann Calls for Open Markets and Dialogue
OECD Secretary-General Mathias Cormann called for reinvigorated global cooperation, urging nations to address trade tensions through dialogue rather than tariffs and restrictions.
“Keeping markets open and preserving the benefits of rules-based global trade is essential for competition, innovation, and growth,” Cormann said.
He added that any de-escalation in geopolitical conflicts, especially in Ukraine and the Middle East, would improve global sentiment and create fresh incentives for investment.
Outlook for the US and Eurozone
- United States: Growth is projected to fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026.
- Eurozone: Growth is expected to remain weak but stable, driven by easing inflation and potential rate cuts.
- China: Slowing momentum and structural challenges may continue to drag on global recovery.
What This Means for India
The OECD's projections reaffirm India’s growing economic prominence, especially as traditional growth engines like the US and China cool down.
Key takeaways for India include:
- Continued investment in infrastructure is essential to maintain momentum.
- Domestic consumption will remain a critical growth pillar.
- Export diversification and trade diplomacy could mitigate risks from global frictions.
As central banks worldwide contemplate interest rate cuts in 2025, India’s moderate inflation and robust macro fundamentals may offer it greater policy flexibility.