However, healthy corporate and bank balance sheets, government’s continued thrust on capital expenditure and the implementation of trade agreements with the key partners are expected to sustain investment and growth momentum.
India’s FY27 growth outlook is positive, though the Middle East conflict and the attendant risks of elevated energy prices, supply chain disruptions, financial market volatility, uncertainty surrounding global trade policies and weather-related disruptions could pose headwinds to growth and inflation in the short run, the RBI annual report for FY26 said.
It projected FY27 real GDP growth at 6.9 per cent.
The annual report projected real gross domestic product (GDP) growth for FY27 at 6.9 per cent with risks tilted to the downside.
Inflation in FY27 is likely to remain aligned with the target on the back of adequate food grain stocks, sufficient reservoir levels and stable agricultural prospects despite possible El Nino conditions and above-normal summer temperature.
However, the evolving upside risks to inflation may emanate from multiple other factors such as spike in global fuel and commodity prices amid geopolitical tensions, potential spillovers to input and wage costs, and volatility in exchange rate, the RBI annual report noted.
Considering all these factors, consumer price inflation for FY27 is projected at 4.6 per cent with risks tilted to the upside.
Fibre2Fashion News Desk (DS)
