New Delhi: India’s economy is expected to maintain steady growth in the coming years, with the GDP projected to expand by 6.5 percent in 2026 and 6.4 percent in 2027. This growth rate will keep India among the fastest-growing major economies globally, according to a report released by DBS Bank on Tuesday.
The DBS report forecasts that retail inflation (CPI) will rise from 2.2 percent in 2025 to 3.5 percent in 2026 and further to 4.5 percent by 2027. This suggests that prices are likely to gradually return to normal levels over this period.
Regarding monetary policy, the report indicates that the Reserve Bank of India (RBI) is expected to hold the policy interest rate, or repo rate, steady at 5.25 percent throughout 2026 and 2027, signalling a stable monetary environment.
Despite global volatility in interest rates, the report predicts a gradual decline in India’s 10-year government bond yields, from 6.60 percent at the start of 2026 to around 6.40 percent by the end of 2027.
Last week saw significant turbulence in global bond markets, with yields in developed countries reaching multi-decade highs. However, DBS Bank views this decline as a normal market correction rather than a sign of a major economic crisis.
The report notes that while the fall in bond yields may cause some concern, it does not indicate any immediate economic threat. Except for Japan, rising bond yields in other developed markets are seen as a return to normal market conditions. The bank emphasised that the credibility of central banks and coordination between governments and monetary authorities will help maintain market stability.
Looking ahead to the upcoming Federal Open Market Committee (FOMC) meeting on January 27-28, the DBS report expects the US Federal Reserve to keep interest rates unchanged. This follows three previous rate cuts and is not a political move but rather an assessment of the impact of earlier cuts and inflation risks.
On the US economy, the report suggests that although job growth may slow slightly, unemployment remains low and incomes are rising, providing ongoing support to economic activity.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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