India’s economic engine is revving up for reliable performance, according to DBS Bank’s latest outlook. The report spotlights GDP growth holding firm at 6.5% through 2026 and 6.4% into 2027, ensuring the country stays ahead in the global growth race.
On the inflation front, a progressive rise in CPI – from 2.2% in 2025 to 3.5% in 2026 and 4.5% in 2027 – indicates a return to equilibrium without overheating. This environment supports the RBI’s strategy to maintain the repo rate at 5.25% over the next couple of years, prioritizing policy continuity.
Despite turbulence in global bonds, where yields in developed markets hit multi-decade highs (Japan aside), India’s 10-year bond yield is set for a soft landing: down from 6.60% in early 2026 to 6.40% by 2027’s close. Experts at DBS attribute this to resilient central bank actions and fiscal-monetary harmony.
The US Fed’s impending FOMC decision on January 27-28 is unlikely to bring rate changes, building on prior cuts while monitoring a cooling jobs market buoyed by low unemployment and income growth. Such international steadiness bodes well for emerging markets like India.
This comprehensive forecast dispels fears of volatility, affirming India’s trajectory toward sustained prosperity and investor confidence.