Economists project FY27 growth to be over 7% in the new GDP series

Economists expect India's FY27 growth to exceed 7 per cent under the new GDP series, supported by capex push and consumption, though trade tensions and El Nino risks loom

India’s economic growth in 2026–27 (FY27) is projected to exceed 7 per cent under the new gross domestic product (GDP) series, supported by a continued push in government capital expenditure and steady urban and rural demand, economists said. Geopolitical tensions in West Asia, uncertainty in the global trade environment, and artificial intelligence-led disruptions, however, remain key downside risks for growth in the next financial year.

 

Chief Economic Advisor V Anantha Nageswaran recently said India’s economy is expected to grow between 7 per cent and 7.4 per cent in FY27 under the new GDP data series, marginally higher than the 6.8–7.2 per cent projected in the Economic Survey presented on January 29.

 

Icra has projected GDP growth of 7 per cent in FY27, citing favourable developments such as the possibility of an interim trade deal with the US at lower tariff rates and improved prospects for domestic investment. “The reduction in goods and services tax (GST) rates, the cumulative 125-basis point policy-rate cut, and a lower-than-expected rise in food inflation, along with upbeat farm sector trends, point to a favourable outlook for private consumption in the upcoming financial year,” said Aditi Nayar, chief economist at Icra.

 

India’s new national accounts series, rebased to 2022–23, incorporates new segments and administrative datasets, including GST transaction data, along with methodological changes such as double deflation in manufacturing.

 

“The improved capture of faster-growing segments of the economy suggests that the measured growth trajectory is likely to be structurally higher under the new series,” said Alexandra Hermann, lead economist (Asia macro) at Oxford Economics.

 

Growth for 2025–26 under the new base, according to the Second Advance Estimates, rose to a three-year high of 7.6 per cent.

 

CareEdge Ratings projected growth of 7.2 per cent in FY27, expecting GST rate rationalisation and past Reserve Bank of India rate cuts to support domestic consumption. “External economic conditions remain volatile. It will be critical to monitor the evolving geopolitical situation and trade policy shifts. The rising probability of El Niño in 2026 is a key watchpoint, posing risks to agriculture and the inflation outlook,” the agency said.

 

QuantEco Research said India’s growth story remains intact and observed that the new series has narrowed the gap between savings and capital formation. However, it added that the economy remains off the pre-pandemic trajectory it could have followed. The research house expects FY27 growth in the range of 6.6–6.8 per cent, with a mild upside bias contingent on US tariff de-escalation. “Hopefully, this time around the new GDP series will integrate seamlessly into the statistical framework with clarity and coherence,” QuantEco said.

 

Elara Global Research projected growth of 7–7.3 per cent for FY27, with an upside bias, citing the government’s sustained focus on deregulation as a key driver of efficiency and productivity gains.

 

BofA Global Research raised its GDP growth forecast to 7.4 per cent from 6.8 per cent, reflecting a less adverse trade backdrop and relatively accommodative fiscal and monetary conditions. “This increase represents lower risks to growth and resilience in both private consumption and private investment. While commodity prices are inching higher, even at current levels there is room for monetary policy to remain accommodative,” it said.