India’s nominal GDP growth is expected to improve to around 11 per cent in FY27, supported by resilient domestic consumption, credit-led demand, and continued policy support, according to a report by a leading mutual fund.
Real GDP growth is projected at approximately 7.2 per cent in FY27, reflecting a constructive medium-term outlook driven by structural reforms and increasing premiumisation across sectors. While growth momentum remains healthy, global economic slowdown and geopolitical risks continue to pose potential headwinds.
Inflation is expected to moderate and stabilise near 4 per cent in FY27, allowing the central bank to maintain a prolonged policy pause unless global conditions weaken significantly. Recent liquidity-supporting measures, including large-scale open market operations and currency swaps, are expected to support financial stability.
Rural demand is projected to remain modestly positive, aided by welfare measures and easing inflation that offset income pressures from the kharif season. On the external front, developments in India–US trade could offer limited upside, as competition from Chinese exports remains a structural challenge.
Fiscal consolidation is expected to continue, with the fiscal deficit projected to narrow further in FY27. However, elevated state-level deficits and higher government bond supply may keep debt market dynamics tight.
The report also noted that currency movements in recent years were influenced by hedging demand and global yield trends. India’s relatively low inflation, stable crude prices, fiscal discipline, and manageable current account deficit continue to support macroeconomic stability.
Looking ahead, consumption-driven sectors, financial services, and select industrial segments are expected to remain key drivers of growth in India’s evolving economic landscape.
