India Ratings ups India GDP growth forecast to 6.8 per cent for FY27

India Ratings and Research (Ind-Ra) on Tuesday raised its GDP growth forecast for the Indian economy in 2026-27 by 10 basis points to 6.8% from its May estimate of 6.7%. However, the agency warned that El Nino weather and geopolitical conflicts could slow growth, keeping it below the National Statistical Office’s provisional FY26 estimate of 7.6%. Key risks include unresolved West Asia conflicts, high inflation, currency depreciation, weak global trade, and El Nino’s impact on agriculture. Ind-Ra lowered its FY27 crude oil price assumption by $10 to $85 per barrel. Agriculture’s GDP contribution is expected to slow to 2% from 3% in FY26 due to severe weather risks. Monsoon delays are already raising food prices and consumer inflation. Wholesale price inflation is projected at 8.5% in FY27, while retail inflation peaks at 5.9% in Q3FY27 before easing to 5%. Private consumption growth will slow to 7.2% from 7.7% due to El Nino’s rural income impact. Public sector capital expenditure will sustain 8% GDP growth, but the current account deficit is expected to widen to 1.5% of GDP. The Reserve Bank of India is likely to maintain neutral monetary policy.