India’s gross domestic product (GDP) is projected to grow 6.7 per cent in 2026, 7 per cent in 2027 and 6.8 per cent in 2028, a report said on Thursday.
Lower inflation and resilient labour markets should continue to support consumer spending in most developed markets, the report from S&P Global Ratings said, forecasting stable global economic expansion of 3.2 per cent in 2026 and 2027.
The report said that as growth slows in the United States and China, the eurozone continues to recover and emerging markets (EMs) extend their resilient streak.
The ratings agency said the global macro narrative has shifted positively owing first to a better‑than‑expected outcome around US tariffs, as effective rates came lower than initially thought.
Also, uncertainty around these rates has eased, underscored by the detente between the US and China, it said.
The firm projected EMs to be the primary engine of global economic growth in 2026, contributing about two-thirds of global GDP growth, with EM growth forecast at 4.4 per cent versus 1.5 per cent for advanced economies.
The passthrough of tariffs to American consumers have been somewhat slower than we anticipated, suggesting US companies are absorbing the higher costs (with resulting lower margins).
The second positive development is a complement of tailwinds to growth, including the AI investment boom (primarily in the US), accommodative financial conditions, and lower oil prices.
However, the report said that assumptions about AI’s transformative power increasingly drive market valuations and investment volumes globally, which may lead to overinvestment in data centre constructions and pain later for credit conditions.
“We expect robust domestic demand to drive approximately three-quarters of real GDP growth in EMs in 2026. This is further supported by broadly stable inflation on the back of a weak US dollar and favourable energy and food prices,” the report noted.
