Indian economy will likely log faster growth at 6.7 percent in FY25 compared with 6.6 percent projected earlier, Organisation for Economic Co-operation and Development said in its Interim Economic Outlook on September 25.

“Global output growth has remained resilient, and inflation has continued to moderate. Growth has been relatively robust in many G20 countries, including the United States, Brazil, India, Indonesia and the United Kingdom,” it said.

The 38-member grouping of developed economies also noted that growth is expected to increase in FY26 to 6.8 percent, up 20 bps from its May forecast.

“Domestic demand has buoyed activity in Brazil, India and Indonesia, but has slowed in Mexico with the services sector losing momentum,” OECD noted.

On the inflation front, the OECD expects prices to rise faster, at 4.5 percent, compared with its May projection of a 4.3 percent increase.

However, it noted that prices would likely inch towards the RBI’s mid-point target of 4 percent in FY26.

Consumer inflation remained below 4 percent in July and August owing to favourable base effects; economists expect it to rise to 5 percent in the coming months.

Earlier, on September 25, ADB retained India’s growth at 7 percent for FY25, projecting a pick up to 7.2 percent in FY26.

India will likely remain the fastest-growing economy as per OECD forecasts.

“Global GDP growth is projected to stabilise at 3.2 percent in 2024 and 2025, with further disinflation, improving real incomes, and less restrictive monetary policy in many economies helping underpin demand,” OECD said.

However, the organisation noted that geopolitical and trade tensions could pose risks to the outlook. It was quick to point out that rising incomes could push growth further.

“Reinvigorating product market reforms that promote open markets with healthy competitive dynamics is an essential step to foster stronger sustained economic growth and help alleviate longer-term fiscal pressures,” the grouping highlighted.