Economic updates and GDP

Global Economic Trends & GDP Forecasts

IMF projections show global real GDP growth which is moderating around 3.2 % in 2025 with advanced economies slower (1.6 %) and emerging markets faster (4 %).

World Bank and other forecasters are warning slower world growth due to trade barriers, geopolitical uncertainties and policy shifts.

Deloitte’s weekly economic updates highlight mixed regional performance which includes focus on inflation and output.

G20 GDP Growth: Mixed Picture

OECD data for Q3 2025 shows divergent GDP growth across G20 members with some (e.g., Canada, India, China) improving modestly while others (Japan, Mexico) still contract.

1) GDP Growth : Recent Data & Trends

Strong recent performance:

India’s economy grew sharply in Q2 of FY 2025–26, with real GDP expanding by 8.2% which is the fastest pace in six quarters and well above expectations. This reflects resilient demand across various sectors like manufacturing, services and construction.

A look on earlier trends:

In recent years, growth has fluctuated with some quarters showing slower momentum (e.g., 6.2% growth in late 2024–25) before rebounding.

2) Forecasts for FY26 & Beyond

Official and expert forecasts:

The Reserve Bank of India (RBI) has raised its GDP growth forecast for FY 2025–26 to around 7.3% up from earlier projections.

Credit rating agencies and economists expect growth to stay between 6.5%–7.4% in FY26, supported by tax cuts, monetary easing and structural reforms.

The International Monetary Fund (IMF) projects India’s GDP growth at 6.6% for FY26 with a moderation to around 6.2% in FY27 amid global headwinds.

What are long term projections?

Global research institutions (e.g., World Bank, Morgan Stanley) continues to see India outpacing most large economies in growth terms through 2026.

3) India’s Global Economic Standing

India is now among the world’s largest economies. According to recent official statements India has become the fourth-largest economy globally, surpassing Japan and the UK in nominal GDP terms.

Shifting global dynamics:

Indian policymakers and analysts argue that the global economic hierarchy is evolving with India’s young workforce and growing industrial base positioning it to climb further in the coming years.

4) Major Drivers of Growth

Key factors which are responsible for India’s growth:

Demand for domestic consumption and services is still strong.

GST reforms, tax cuts and reductions in loan rates are majorly important in boosting consumption and investment.

Lower inflation in recent months has also helped in maintaining real incomes and consumption of people.

5) Challenges & Risks

Despite strong GDP figures, there are challenges which India is facing.

External pressures such as higher tariffs on exports to the U.S. and global trade tensions may dampen export growth.

Some slower sectors like manufacturing and mining have restrained growth at times.

Economic growth rates (nationally) still need improvements in employment quality, income distribution and living standard areas about which economists flag for improvement.

By Bhumi Arora

(Sources : World Bank , The Economic Times , Mint , AajTak)