Goldman Sachs Forecasts India Growth at 7.2% in 2027, Ahead of China at 4.5%

Goldman Sachs Research expects India’s economy to expand by 7.2% in 2027, significantly faster than China’s projected growth of 4.5%. The forecast positions India among the fastest-growing major economies as the global economy prepares for another year of moderate expansion, supported by easing energy prices and continued investment in artificial intelligence.

The investment bank’s projection suggests that India’s growth will moderate from an estimated 7.9% in 2026 but remain above the consensus forecast of 6.8%. China’s economy, meanwhile, is expected to face continued pressure from weak domestic consumption and challenges in its property sector, even as exports provide support. Goldman Sachs expects global GDP to grow 2.8% in 2027, compared with an estimated 2.7% in 2026.

Goldman Sachs GDP Growth Forecast for India and China

The latest projections highlight the difference in growth momentum between the world’s two largest Asian economies.

India is expected to maintain stronger economic expansion, supported by domestic economic activity. China’s growth is projected to remain lower as its property market weakness and subdued consumer spending continue to weigh on domestic demand.

Economy	2026 estimated growth	2027 forecast
India	7.9%	7.2%
China	4.6%	4.5%
United States	2.3%	2.4%
Global economy	2.7%	2.8%

Goldman Sachs’ India forecast is 0.4 percentage points above the consensus estimate. China’s projected growth is also slightly higher than its consensus forecast of 4.4%.

The projections indicate that India is expected to retain its growth advantage over China in 2027, although both economies are expected to expand at a slower pace than some earlier periods.

Why Goldman Sachs Expects India to Grow 7.2%

India’s projected growth reflects its position as a major source of global economic expansion.

Domestic consumption, investment activity and the country’s expanding services and manufacturing sectors are important parts of its growth outlook. A large domestic market also provides a degree of insulation from fluctuations in external demand compared with economies that depend more heavily on exports.

Goldman Sachs’ latest forecast places India above its consensus growth estimate, suggesting that the bank expects the economy to maintain relatively strong momentum despite a moderation from 2026.

Lower global energy prices could provide additional support. India imports a substantial share of its crude oil requirements, making the economy sensitive to movements in international energy prices.

A decline in crude prices can reduce the import bill, ease pressure on inflation and improve the external balance. It can also provide some relief to businesses facing higher transportation, energy and production costs.

However, the 7.2% figure remains a forecast rather than a confirmed outcome. Actual growth will depend on domestic demand, investment, inflation, government policy and global economic conditions during 2027.

China’s Growth Faces Property Market and Consumption Challenges

Goldman Sachs expects China’s economy to grow 4.5% in 2027, slightly below its estimated 4.6% expansion in 2026.

The bank expects exports to remain a major source of support for China’s economy. Strong export performance could help offset weakness in other parts of the economy.

However, domestic demand remains a concern.

China’s property sector continues to face structural challenges, while underlying consumer spending has remained weak. These factors could limit the contribution of household consumption and domestic investment to overall economic growth.

Goldman Sachs expects China’s trade surplus to increase further, reflecting strong export expectations. However, continued reliance on external demand could also create challenges for other manufacturing-heavy economies competing with Chinese exporters.

The contrast with India is notable: while China is expected to receive considerable support from exports, India’s growth outlook is more closely associated with domestic economic activity.

Global Economy Expected to Grow 2.8% in 2027

Goldman Sachs forecasts global GDP growth of 2.8% in 2027, marginally higher than the estimated 2.7% expansion in 2026.

The bank describes the outlook as another year of solid but relatively modest global economic growth.

Two factors are expected to support the improvement: lower energy prices and continued investment in artificial intelligence.

Goldman Sachs expects the United States, Japan and the United Kingdom to outperform consensus growth estimates. South Korea and Taiwan are also expected to benefit from demand for AI-related exports.

However, tighter financial conditions and less supportive fiscal policies could limit the pace of global expansion.

AI Investment Could Reach $1.8 Trillion in 2027

Artificial intelligence investment is expected to remain a major contributor to global economic activity.

Goldman Sachs projects global nominal AI investment to increase to $1.8 trillion in 2027, compared with approximately $1.1 trillion in 2026.

The increase is expected to be driven largely by higher spending on hardware in the United States, including investment in computing infrastructure and semiconductor-related equipment.

The bank estimates that AI investment could contribute 0.4 percentage points to global GDP growth in 2027. Its estimated contribution to underlying US GDP growth is 0.6 percentage points after accounting for statistical undercounting of semiconductor investment and related intellectual property exports.

However, the bank expects the growth rate of AI investment to moderate, with the strongest year-on-year increase projected during the first half of 2027.

The outlook suggests that AI infrastructure spending could remain an important source of demand for technology companies, semiconductor manufacturers and data-centre operators.

Oil Prices Expected to Decline to $78 per Barrel

Energy prices are another important component of Goldman Sachs’ 2027 economic outlook.

The bank’s commodity strategists expect Brent crude prices to decline to approximately $78 per barrel by the end of 2027 as global supply conditions improve.

Lower oil prices could provide support to energy-importing economies, including India. Cheaper crude can reduce the cost of imports and potentially ease inflationary pressure.

For India, lower energy prices could also help improve the operating environment for industries with significant fuel, transportation and petrochemical costs.

However, the forecast depends partly on the expected normalisation of energy supply conditions in the Middle East. Any renewed geopolitical escalation could disrupt supplies and push prices higher.

Inflation and Interest Rate Outlook

Goldman Sachs expects global inflation to moderate in 2027 as energy prices decline.

In the United States, core personal consumption expenditures inflation is forecast to fall to 2.4% by the end of 2027, from 3.2% at the end of 2026.

Lower inflation could give some central banks greater flexibility to ease monetary policy later in the year. However, the timing of interest rate changes will depend on how inflation and economic activity develop.

The bank also expects some major economies to experience further monetary tightening early in 2027 before lower inflation creates room for possible rate cuts.

For emerging markets, the combination of energy prices, currency movements and global interest rates will remain important factors influencing investment flows and borrowing costs.

Risks Could Weigh on Global Economic Growth

Despite the relatively positive outlook, Goldman Sachs warned that risks to its global growth projections are tilted to the downside.

Potential escalation of the conflict involving Iran could disrupt energy supplies and reverse the expected decline in oil prices.

Widening government fiscal deficits could also increase borrowing costs and restrict the ability of governments to support economic activity.

AI investment presents another uncertainty. Capacity constraints, regulatory challenges, credit market stress and weaker-than-expected demand could result in lower spending than currently projected.

If investment in AI infrastructure slows more sharply than expected, the impact could extend beyond technology companies to the wider global economy.

The Bigger Picture

Goldman Sachs’ 2027 projections reinforce India’s position as one of the world’s fastest-growing major economies. A forecast of 7.2% growth, compared with China’s 4.5%, highlights the different economic conditions shaping the two countries. India’s domestic market and consumption provide important growth support, while China’s outlook remains more dependent on exports as property-sector weakness and subdued household demand continue.

The global outlook will also be influenced by developments beyond individual economies. Lower oil prices could benefit import-dependent countries, while AI investment is expected to support technology-related spending and economic activity. However, geopolitical tensions, fiscal pressures and uncertainty around technology investment remain significant risks.

Looking Ahead

India’s ability to maintain growth above 7% in 2027 will depend on the strength of consumption, private investment, infrastructure spending and employment generation. Lower energy prices could provide additional support, but global financial conditions and geopolitical developments will remain important variables. The difference between the Goldman Sachs forecast and consensus estimates will also make India’s actual economic performance an important indicator to watch.

For China, the key challenge will be strengthening domestic demand while managing the ongoing property-sector difficulties. At the global level, the interaction between AI investment, energy prices and inflation will shape the growth outlook. Goldman Sachs’ projections provide an encouraging picture for India, but the final outcome will depend on how these economic forces develop throughout 2027.