New Delhi: India’s GDP growth is forecasted at 6.5 per cent in 2026 and 6.4 per cent in 2027, keeping it among the fastest‑growing major economies, a report said on Tuesday.
The report from DBS Bank said that CPI inflation is expected to rise from 2.2 per cent in 2025 to 3.5 per cent in 2026 and 4.5 per cent in 2027, indicating gradual price normalisation.
It stated that the Reserve Bank of India is expected to keep policy rate steady at 5.25 per cent through 2026 and 2027, signalling a stable monetary stance.
“India’s 10‑year government bond yield is projected to ease from 6.60 per cent in early 2026 to 6.40 per cent by end‑2027 despite global rate volatility,” the report said.
Recalling the major events in global bond markets last week, the bank said that bond yields in developed markets “marched higher last week to levels not seen in decades.”
However, the DBS bank judged the sell‑off as a market normalisation rather than a harbinger of a crisis, the report said.
“The selloff may be disconcerting, but the developments are not harbingers of a crisis, in our view,” it added.
In development markets other than Japan, the higher yields are also a reflection of market conditions normalising, it said, adding that “central bank credibility and fiscal monetary coordination could keep the bond boat steady.”
The bank forecasted the US Federal Reserve to pause policy moves at its January 27-28 FOMC meeting, following three consecutive rate cuts.
“We expect the Fed to pause this month not to signal its intransigence against President Trump,” the bank said, adding that the Central bank could assess the impact of earlier cuts and upside inflation risks.
Regarding the US economy, the report said that job growth may have softened, but the unemployment rate is low, and wages are growing in positive real terms.
(IANS)
