UBS sees India's GDP growth slowing to 6.4% in FY27
UBS predicts India's economy will slow a bit, with GDP growth dipping to 6.4% in FY27—just below what most experts expected.
This forecast assumes a US-India trade deal will be reached by the end of 2025, which could lower tariffs, and the moderation in growth is attributed to base effects and tariff-related headwinds.
The good news? Growth is expected to bounce back slightly in FY28 thanks to strong local demand and supportive policies.
A $70 billion stimulus is on the cards
UBS expects a hefty $70 billion stimulus over FY26-27—think GST tweaks, income tax breaks, and direct cash transfers for women—to help keep things moving.
Rural areas might see more spending if monsoons are good and prices stay in check, while new policies should boost city demand too.
India is still on track to become the world's third-largest consumer market by 2026.
Inflation and rupee forecast
Inflation is likely to hover around 4.3%, which isn't too bad, and the current account deficit should be manageable at about 1.2% of GDP.
UBS sees the rupee hitting 90 per dollar by end-FY27 and expects just one small rate cut before pausing further changes.
Still, there are risks: if US tariffs stick around or outsourcing taxes go up, growth could take an extra hit next year.