Goldman Sachs: India to be fastest-growing economy in resilient 2026

Global economic growth is expected to remain resilient in 2026, with India continuing to be one of the fastest-growing major economies, according to Goldman Sachs' Global Economics Analyst Report Macro Outlook 2026. The report projects global growth at 2.8 per cent in 2026, above the consensus estimate of 2.5 per cent, supported by stable inflation and easing monetary conditions across several economies.

"We expect sturdy global growth of 2.8 per cent in 2026, versus a consensus forecast of 2.5 per cent. The US is likely to outperform substantially (2.6 per cent vs. 2.0 per cent) because of reduced tariff drag, tax cuts, and easier financial conditions," the report noted

Emerging Markets to Outperform

The report said that emerging markets, including India, are expected to outperform developed peers amid stronger domestic demand and favourable structural trends. Goldman Sachs forecasts India's real GDP growth at around 6.7 per cent in 2026 and 6.8 per cent in 2027, outpacing consensus growth estimates and keeping India among the world's fastest-growing large economies. The firm estimates China to grow at 4.8 per cent in 2026 and 4.7 per cent in 2027.

It noted that India's growth trajectory continues to benefit from strong domestic consumption, public infrastructure spending and its relatively limited exposure to global trade disruptions compared to export-heavy economies. The report highlights that while advanced economies such as the US and Euro area are expected to see moderate growth, emerging economies like India remain key contributors to global expansion. India's performance is also reflected in IMF-weighted global growth calculations, where faster-growing economies such as India and China carry greater significance

Easing Inflation to Support Growth

On inflation, Goldman Sachs expects price pressures to ease across most economies by end-2026, supported by lower commodity prices, improved productivity and easing supply-side constraints. This environment is likely to allow central banks in several emerging markets to maintain or adopt accommodative policy stances, which could further support growth prospects for countries like India

Global Labour Market a Key Risk

The report, however, flags global labour market weakness as a key risk, noting that productivity gains are not translating proportionately into job creation. While this trend is more pronounced in developed markets, the broader global slowdown in employment growth could pose indirect challenges for emerging economies over time.

Overall, Goldman Sachs maintains a constructive outlook for emerging markets in 2026, with India positioned as a relative bright spot amid steady global growth, moderating inflation and supportive financial conditions. (ANI)

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