Anondita Medicare Ltd Management Discussions

GLOBAL ECONOMY

The year 2025 was marked by heightened global economic uncertainty amid shifts in trade policy, accelerating technological advancements and escalating geopolitical tensions. One of the most significant developments during the year was the sharp escalation in global trade tensions following the announcement of the ‘Liberation Day tariffs by the United States on April 2, 2025. Subsequent tariff increases on selected trading partners raised concerns over a renewed phase of protectionism and fragmentation in global trade. Although the US Supreme Court later struck down certain tariff measures, the effective US tariff rate remained elevated at nearly 10%, among the highest levels seen in decades, indicating a structural shift away from the low-tariff global trade environment that prevailed over the past several years.

At the same time, rapid advancements in artificial intelligence (AI) continued to reshape the global economic landscape. Increased investments in AI infrastructure, semiconductor ecosystems and digital technologies supported capital expenditure across several advanced economies. However, the pace of technological adoption also intensified concerns around labour market disruption, particularly across service-oriented sectors, contributing to uncertainty in employment and income outlooks.

Geopolitical tensions further intensified during the year, culminating in a direct confrontation involving the US, Iran and Israel. The conflict disrupted global supply chains, including the temporary closure of the Strait of Hormuz. This drove a sharp rise in crude oil prices and shipping costs, adding to global volatility and complicating the inflation outlook.

Against this backdrop, global growth is projected at 3.1% in 2026, compared with 3.4% in 2025, before improving marginally to 3.2% in 2027, according to the International Monetary Fund (IMF) World Economic Outlook (April 2026). However, growth trends remained uneven across regions. Advanced Economies are projected to grow by 1.8% in 2026 and 1.7% in 2027, reflecting weak industrial activity, tighter financial conditions and subdued consumer demand. Emerging Market and Developing Economies are projected to grow by 3.9% in 2026 compared with 4.4% in 2025, before recovering to 4.2% in 2027, supported by domestic demand resilience and easing financial conditions in select markets.

Global headline inflation is projected to increase from 4.1% in 2025 to 4.4% in 2026, before moderating to 3.7% in 2027. Elevated energy prices, supply-chain disruptions and trade-related cost pressures contributed to the upward revision in inflation expectations during the year.

Looking ahead, global growth is expected to remain dependent on the trajectory of geopolitical developments, trade policies and monetary conditions across major economies. While gradual easing of supply-side disruptions and productivity gains from AI adoption may support medium-term growth, risks from prolonged geopolitical tensions, commodity price volatility and weaker global demand continue to persist. In this environment, fiscal discipline, structural reforms and resilient balance sheets are expected to remain critical for sustaining economic stability and growth momentum.

INDIAN ECONOMY

While the global economy in FY 2026 was marked by geopolitical tensions, trade realignments, persistent inflationary pressures and uneven growth across major economies, India continued to demonstrate relative macroeconomic resilience. Supported by strong domestic demand, stable policy conditions and sustained investment activity, India remained among the fastest-growing major economies globally, with real GDP growth rising to 7.7% in FY 2026 from 7.1% in FY 2025, according to the Provisional Estimates (PE) of Annual Gross Domestic Product (GDP) for the Financial Year (2025-26) by MoSPI on June 5 2026.

The growth was mainly driven by domestic consumption. Private consumption and investment have provided consistent momentum, with the services sector continuing to be the main driver on the supply side. Manufacturing has shown further improvement, and agriculture has offered stability, despite structural constraints.

Macroeconomic fundamentals remained strong, with inflation easing from 4.6% in FY 2025 to 2.1% in FY 2026, supported by benign food prices, GST rate rationalisation, and stable supply