UN projects India’s GDP growth at robust pace for 2026 despite geopolitical risks

"Strong demand in major markets may partially offset the US tariff hike impact on India," the report states.

Although the UN report has lowered the estimate for India’s growth rate from 7.4 per cent earlier, it is in tune with the IMF’s forecast which sees India as the only major economy that will post an above 6 per cent growth rate in 2025-26.

The UN’s 'World Economic Situation and Prospects 2026' report finds that the world economy faces the risk of a prolonged period of slower growth compared with the pre-pandemic era, with current growth failing to deliver broad-based development gains, leaving many countries, communities and households behind.

Geopolitical risks, continuing policy uncertainty and fiscal challenges cloud the global economic outlook. In 2025, a sharp rise in United States tariffs unsettled the trade environment, but the world economy proved more resilient than expected.

In 2026, global growth is expected to moderate as weaker international trade is only partially offset by continued support from monetary easing, the report states.

The report also highlights that inflation has eased considerably in most economies, yet rising cost of living continues to strain household budgets and exacerbating inequality. Risks of renewed supply disruptions remain elevated — stemming from conflicts, climate related disasters, trade fragmentation, and geopolitical tensions — adding to global uncertainty.

Meanwhile, India’s real GDP growth rate has been projected at 7.4 per cent in FY 2025-26, up from 6.5 per cent during FY 2024-25, according to the advance estimates released by the Ministry of Statistics on Wednesday.

The country’s economic growth had accelerated to a robust 8.2 per cent in the second quarter (July-September) current financial year compared to the corresponding figure of 5.6 per cent during the same quarter of FY 2024-25, according to official figures released in November.

The figures show that India continues to be the world’s fastest growing major economy despite global headwinds such as the US tariff hikes.

The IMF forecasts India to be the only economy that is expected to clock an over 6 per cent growth rate in 2025-26, as the US tariff turmoil is expected to disrupt world trade and slow down the growth of the global economy.