India's FY27 growth may beat RBI's 6.7% forecast
What's the story
India's economic growth could exceed the Reserve Bank of India's (RBI) projection of 6.7% for the current fiscal year, RBI Deputy Governor Poonam Gupta has said. Her optimistic outlook is based on high-frequency indicators that suggest a better-than-expected performance in the April-June quarter. The official data for this period will be released later this month, with economists predicting growth rates between 6.9% and 8%.
Economic resilience
Gupta's optimistic outlook amid global challenges
Gupta highlighted the resilience of India's economy in the face of external and domestic risks.
She said, "My expectation is that 2027 would be a benign year for policymakers. While we have projected growth at 6.7% this year, it is quite likely that the numbers may turn out to be better."
Her comments come amid challenges such as oil price volatility, tariff-related pressures, global uncertainty, and potential rainfall deficits.
Growth aspirations
Gupta also emphasized India's improving external position
Despite the challenges, Gupta is confident that India's economy can sustain its momentum.
She said, "Going forward, notwithstanding these shocks, I would say, 7.5% is a given and we should aspire to do better than that."
Gupta also emphasized India's improving external position, saying, "The balance of payments (BoP) is likely to be much more conducive as well."
This optimism comes amid expectations of foreign inflows up to $80 billion after measures to stabilize a depreciating currency.
Fiscal comparison
Comparison of India's fiscal position with advanced economies
Gupta also compared India's fiscal position with that of advanced economies.
She cited an IMF publication predicting a significant rise in debt levels in developed economies over the coming years.
The data she cited projected the debt-to-GDP ratio of advanced economies to increase from 108% in 2026 to 115% by 2031, while India's is expected to decline from 83% in 2026 to 78% over the same period.