India’s GDP growth resilient amid robust consumption, strong public investment: UN report

New Delhi: A new United Nations (UN) report has said that GDP growth in India is estimated at 6.6 per cent for 2026 and 6.7 per cent for 2027 — supported by resilient consumption and strong public investment, which should largely offset the adverse impact of higher United States tariffs.

Recent tax reforms and monetary easing should provide additional near-term support, said the ‘World Economic Situation and Prospects 2026’ report.

“Several large developing economies, including China, India, and Indonesia, are expected to continue experiencing solid growth driven by resilient domestic demand or targeted policy measures,” the UN report mentioned.

The outlook for South Asia remains relatively strong, though growth is projected to moderate from an estimated 5.9 per cent in 2025 to 5.6 per cent in 2026 before recovering to 5.9 per cent in 2027, it added.

It further stated that the global economy has shown resilience, but the outlook remains clouded by trade tensions, fiscal strains and persistent uncertainty.

“Growth is expected to slow to 2.7 per cent in 2026, below 2025 levels and the pre-pandemic average, as subdued investment and structural headwinds weigh on momentum despite easing inflation and monetary loosening,” the UN report noted.

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 trade performed better than expected in 2025, driven by early shipments ahead of higher tariffs and robust services exports. But growth is projected to slow in 2026, as temporary drivers fade and trade barriers and policy uncertainty persist. Investment remains subdued in most regions,” said the report.

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, it added.

“Monetary policy alone cannot manage persistent price pressures. Better alignment between monetary, fiscal and industrial policies is essential to stabilise inflation, support investment and protect vulnerable groups. Targeted and temporary measures can help protect households from high prices and support social cohesion, while credible medium-term fiscal plans and prudent debt management are essential to rebuild fiscal space,” the report emphasised.

IANS