India's GDP to grow 6.9% in FY26, says Deloitte
What's the story
Deloitte India has projected a robust growth for the Indian economy, estimating a GDP increase of 6.7-6.9% in the current fiscal year. The forecast is based on strong domestic demand and policy reforms such as GST 2.0. This is an improvement over Deloitte's previous estimate by 0.3% points and matches the Reserve Bank of India (RBI)'s projection for FY26 economic growth at 6.8%.
Economic outlook
Consumer spending to rise during festive quarter
Deloitte India's 'India Economic Outlook' report highlights the country's resilience and growth potential. The report predicts a similar GDP growth rate for the next fiscal year, albeit with greater variation due to trade and investment uncertainties. Rumki Majumdar, an economist at Deloitte India, said consumer spending is expected to rise during the festive quarter, paving the way for strong private investment as businesses prepare for higher demand.
Trade expectations
Global headwinds still pose risks to growth
Majumdar also noted that India is expected to finalize a trade deal with the US and EU by year-end, which should boost overall investment sentiments. He said, "Strong growth in the first and third quarters is likely to drive overall annual growth." However, global headwinds still pose risks to this fiscal year's growth, including rising trade uncertainties and India's failure to secure a trade deal with the United States.
Inflation concerns
Core inflation remains stubbornly high
Majumdar warned that core inflation remains stubbornly high, consistently above 4% since February. He said this persistent price pressure could limit the RBI's ability to cut rates further. "Moreover, if the US Federal Reserve maintains elevated policy rates for an extended period, it could tighten global liquidity conditions," he added. This scenario may also accelerate capital outflows from emerging markets like India, a trend already visible in recent months.