India’s GDP likely to grow 7 pc, higher than earlier estimate: Report

New Delhi, June 30 (IANS) India’s gross domestic product (GDP) growth in 2026 is expected to touch 7 per cent, up from an earlier estimate of 6.2 per cent in April, a report has said.

The report from Bank of America (BofA) Securities pegged India’s growth in 2027 at 7 per cent. Moreover, it has projected international oil benchmark Brent crude will average $72 a barrel in H2 2026 and $65 per bbl in 2027, on the assumption that peace holds in West Asia.

Analysts at the global brokerage marginally upgraded their global growth outlook to 3.2 per cent for 2026 and 3.5 per cent for 2027, which is a 10-bps upward revision for both years compared to their April update.

“We also introduce our initial forecast for 2028 at 3.3 per cent and mark down global inflation to 3 per cent this year, decelerating to 2.4 per cent in 2027 and 2.5 per cent in 2028,” the report said.

The global economy will likely be tested by tighter financial conditions emanating from the US going ahead, the report said, forecasting a 75 basis points (bps) of Fed hikes in 2026, starting in September.

Due to the US-Iran peace deal, crude price correction and stronger-than-expected 1Q26 GDP prints overall, the firm expects “EM Asia (ex. China) growth to expand by 5.9 per cent in 2026 (versus April projection of 4.9 per cent), before expanding by 5.8 per cent in 2027”.

The report mentioned the global economy being driven by US President Donald Trump’s policies, the artificial intelligence (AI) boom, China’s overcapacity, fiscal imbalances, and excess global liquidity.

“The AI boom, fiscal imbalances, and easy financial conditions have supported K-shaped dynamics for the US and global economy via wealth effects, but this same pillar of resilience could turn into a source of weakness if there is a significant correction in asset prices,” the report flagged.

“The labour market has firmed up and inflation dynamics have deteriorated in the US. While some one-offs are partly to blame, and tariffs should soon roll off, most of the FOMC seems to be losing patience after 5 years of high inflation,” BofA Securities said.

Crude oil prices have seen a sharp correction of nearly 42 per cent to $72/bbl from their peak earlier this year.

Following the Strait of Hormuz reopening, a new daily record high number of crossings was set on June 24, with 78 vessels passing the strait, marking a recovery to 57 per cent of pre-war volumes on a daily basis, according to another recent report.

—IANS

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