India is projected to maintain its position as the world's fastest-growing major economy over the next three years, with China and the US following closely behind in terms of growth rates, according to S&P Global Market Intelligence.
After achieving a remarkable growth rate of 8.1 percent in 2023, India, currently the world's fifth-largest economy, is expected to grow by 6.7 percent in 2024, 6.3 percent in 2025, and 6.1 percent in 2026. Meanwhile, China is forecasted to grow at 5.0 percent in 2024, 4.6 percent in 2025, and 4.5 percent in 2026, while the US, which grew by 2.5 percent in 2023, is anticipated to see growth rates of 2.4 percent in 2024, and less than 2.0 percent in 2025 and 2026.
The World Bank has kept its growth forecast for India at 6.6 percent for FY25, noting that India will continue to lead among the world's largest economies, albeit with a moderated growth pace. The bank projects an average annual growth of 6.7 percent for the three fiscal years starting in FY 2024/25, with growth rates of 6.7 percent and 6.8 percent for FY26 and FY27, respectively.
In FY24, the National Statistical Office estimates a GDP growth of 8.2 percent. The Reserve Bank of India (RBI) has revised its growth projection for FY25 to 7.2 percent from the earlier estimate of 7 percent. Fitch Ratings has also increased India's growth forecast to 7.2 percent, citing a recovery in consumer spending and increased investment, with projections of 6.5 percent for fiscal year 2025-26 and 6.2 percent for 2026-27.
S&P Global Market Intelligence maintains a stable outlook for the Middle East and North Africa (MENA) region, while revising its growth forecasts downward for the US, Canada, Brazil, and Japan, and upward for China, the eurozone, the UK, and Russia. The global growth forecast for 2025 has been slightly adjusted from 2.7 percent to 2.8 percent, with higher revisions for some major countries including the US and China.
Ken Wattret, a global economist at S&P Global Market Intelligence, highlights the resilience of global economic conditions despite increasing geopolitical uncertainties. He notes that the moderation of inflation and central bank policy easing are crucial supports, although recent financial market jitters in France and Latin America could indicate more turbulent times ahead.
Real GDP growth in the Middle East is forecasted at 1.7 percent in 2024 and 2.8 percent in 2025, with high growth risks due to the ongoing conflict between Israel and Hamas. S&P Global Market Intelligence anticipates a more widespread monetary policy easing as underlying price pressures continue to moderate, leading to a gradual decline in global consumer price inflation from 2024 to 2026.
Despite the US Federal Reserve's inaction, monetary policy easing is expected to become more widespread, with anticipated rate cuts by the European Central Bank and further cuts in Canada. The forecast includes the initiation of easing cycles by the Fed and the Bank of England in the second half of the year, along with more widespread rate cuts across emerging markets in tandem with Fed easing.
