India's Gross Domestic Product (GDP) pegged at 6.4% in 2026, to remain fastest-growing economy till next year despite global slowdown: Report

India is projected to remain the world’s fastest-growing economy through 2026, with its Gross Domestic Product (GDP) growth pegged at 5.9% for Q4 2025 and 6.4% in 2026, according to Morgan Stanley’s Global Investment Committee. Despite global headwinds, including trade shocks and rising protectionism, India is expected to outperform major economies due to strong domestic demand, structural reforms, and a favourable policy environment. The report notes that India's sustained growth contrasts with a broader global slowdown; global real GDP growth is expected to decline from 3.5% in 2024 to 2.5% in 2025.

While other major economies such as the United States, the eurozone, and China are forecast to witness subdued growth owing to weaker consumption, exports, and tariff-related uncertainties, India’s economic trajectory remains robust. The report highlights India's increasing weight in global indices like Morgan Stanley Capital International (MSCI) Emerging Markets, supported by steady nominal GDP growth and solid domestic investment flows. It maintains an overweight stance on India, alongside Singapore and the United Arab Emirates (UAE), within the Asia-Pacific region. Even though Indian equities appear expensive compared to historical valuations, sustained institutional and retail participation is likely to support current valuation levels. The forecast positions India as a resilient economic engine amid global uncertainty.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.