Stronger Growth Seen in First Half of FY27
The Reserve Bank of India has revised its real GDP growth forecast upward for the first half of the 2026–27 financial year, citing support from trade agreements, GST rationalisation, and robust agricultural output.The central bank now expects the Indian economy to grow 6.9 per cent in the April–June quarter of FY27, followed by 7 per cent growth in the July–September period. These projections mark an improvement over estimates released in December, when growth for the June quarter was pegged at 6.7 per cent and the subsequent quarter at 6.8 per cent.
Full-Year FY27 Projections to Follow in April
The RBI said that projections for the full financial year 2026–27 will be announced in the April monetary policy statement. This will incorporate the new GDP and CPI series with an updated base year of 2024 set at 100.FY26 Growth Momentum Remains Firm
Unveiling the monetary policy, RBI Governor Sanjay Malhotra said the Indian economy remains on a steadily improving path.According to the central bank, real GDP growth is expected to reach 7.4 per cent in FY26, significantly higher than the previous year. The governor highlighted that despite global headwinds, private consumption and fixed investment have continued to support economic expansion.
Agriculture, Manufacturing, and Services to Support FY27 Growth
Looking ahead to FY27, the RBI expects economic activity to remain resilient. Agricultural performance is likely to benefit from healthy reservoir levels, strong rabi sowing, and improved crop vegetation conditions.Improving corporate sector performance and sustained momentum in the informal sector are expected to support manufacturing activity. At the same time, growth in the construction sector is projected to remain firm, while the services sector is expected to stay resilient on the back of strengthening domestic demand.
Consumption and Investment Outlook Remains Positive
On the demand side, the RBI said momentum in private consumption is expected to sustain into FY27, with rural demand remaining steady. Recovery in urban consumption is also expected to strengthen, aided by GST rationalisation and monetary easing.The governor noted that high capacity utilisation, accelerating bank credit, supportive financial conditions, and the government’s continued focus on infrastructure development should provide further impetus to investment activity.
Trade Agreements and Budget Measures to Aid Growth
The RBI also highlighted the role of external and fiscal support for medium-term growth. The recently concluded India–EU free trade agreement, along with the proposed India–US trade deal and other trade arrangements, are expected to support exports.In addition, several measures announced in the Union Budget are expected to remain conducive to sustaining India’s growth momentum.
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