Citi lifts India's FY27 forecast to 6.9% after oil drop
Citi just raised its forecast for India's economic growth in FY27 to 6.9%, up from 6.6%.
This comes after global oil prices fell sharply, thanks to the U.S.-Iran peace deal that reopened the Strait of Hormuz.
Cheaper oil is expected to make things more affordable and give a nice push to spending within India.
Citi expects India BoP surplus $45B
With lower oil costs, Citi now expects India's balance of payments surplus in FY27 to jump from $5 billion to $45 billion, a big leap driven by a $31 billion cut in net oil imports.
The current account deficit estimate dropped from 2% of GDP to 0.9%, and inflation is now forecast at 4.7% instead of 4.9%.
Because of these shifts, Citi thinks the Reserve Bank will keep interest rates steady through FY27, rather than raising them as previously predicted.