In a detailed analysis released this week, DBS Bank forecasts continued momentum for India’s economy, cementing its status as a global growth leader. Expect GDP to expand by 6.5% in 2026 before marginally easing to 6.4% in 2027 – figures that outpace most peers worldwide.
Inflation trends point to a measured uptick: CPI inflation climbing from 2.2% next year to 3.5% in 2026 and 4.5% in 2027. This trajectory suggests prices settling into comfortable territory, allowing the RBI to anchor the repo rate at 5.25% without adjustments through the forecast period.
Bond yields tell a story of gradual relief for India. The 10-year G-sec yield could dip from 6.60% early in 2026 to 6.40% by late 2027, even against a backdrop of global yield spikes in advanced markets. DBS dismisses these movements as routine market corrections rather than distress signals, crediting strong institutional frameworks.
Across the Atlantic, the US Federal Reserve’s next policy meet on January 27-28 is tipped to hold rates steady. After three rate reductions, the Fed is evaluating data on employment slowdowns – which remain contained – alongside wage gains and inflation pressures. India’s policy makers can draw reassurance from this synchronized global steadiness.
Overall, the report bolsters confidence in India’s economic architecture, promising stability and growth in the years ahead.
