India to grow at 6.8-7.1% in FY27: SBI Research
What's the story
India's economy is expected to grow by 6.8%-7.1% in FY27, despite the ongoing oil shock and West Asia conflict, a recent report by SBI Research has revealed. The report highlights that unlike previous oil shocks that led to US recessions, this time the situation is different with US households receiving substantial tax refunds and being energy self-sufficient.
Economic resilience
India's growth amid geopolitical conflicts
The SBI report emphasizes India's strong macroeconomic position, even as it faces global geopolitical conflicts. The country's growth for FY26 is pegged at 7.6%, similar to the Russia-Ukraine crisis period when India was growing over 9%. For FY27, the growth rate is estimated at 6.8%, although fears of a potential Super El Nino could affect these projections.
Financial outlook
Inflation and fiscal deficit projections
The report also projects India's inflation to average around 4.5% in FY27, with fiscal deficit of 4.5%-4.6%. It highlights strength of India's banking sector, while calling for a comprehensive package to support the Balance of Payments and stabilize the Rupee amid these global challenges.
Market shifts
'Green shoots' for India to leverage
The report notes that global tensions have created "multiple vortexes of headwinds" affecting agriculture, MSMEs, consumption, and also global supply chains. However, it also sees "green shoots" that India can leverage to reposition itself in the global value chain. With rising West Asia tensions prompting certain global investors and NRIs to reassess concentrated exposure to Dubai, IFSC GIFT City could emerge as a stable global financial destination.