The United Nations has lowered India’s economic growth forecast for 2026 to 6.4 per cent from its earlier estimate of 6.6 per cent, citing rising global uncertainty and economic disruptions linked to the ongoing West Asia crisis.
In its latest report released on Tuesday, the United Nations Department of Economic and Social Affairs said the conflict in West Asia has emerged as another major shock for the global economy, slowing growth momentum, reviving inflationary pressures, and increasing uncertainty across markets.
Despite the downgrade, India is expected to remain among the world’s fastest-growing major economies.
The report noted that escalating geopolitical tensions are impacting economies through higher energy prices, trade disruptions, and tighter financial conditions.
“Ingo Pitterle, Senior Economist and Officer-in-Charge of the Global Economic Monitoring Branch at the Economic Analysis and Policy Division of UN DESA, said India is ‘not immune’ to the current global challenges.”
He pointed out that India’s dependence on energy imports makes it vulnerable to rising crude prices and supply-side disruptions stemming from the West Asia conflict.
“It is a large energy importer, and it is also exposed to other channels, for example, remittances, adding to some vulnerability,” Pitterle said.
He further warned that tighter global financial conditions could complicate monetary policy decisions for emerging economies such as India.
The UN report comes amid growing concerns over the broader economic impact of geopolitical tensions, with fears of persistent inflation, volatile commodity prices, and slowing global trade weighing on growth prospects worldwide.
Recently, Morgan Stanley has also revised the growth forecast for India upwards to 6.7 per cent from its April 2026 projection of 6.2 per cent despite geopolitical concerns in West Asia.
It has earlier predicted crude oil prices to average $95 per barrel (bbl) in FY27, with gas availability as an additional constraint. Now, the crude oil forecast has been revised downward to $87.5/bbl.