Ratings agency - Crisil has projected that India’s real gross domestic product (GDP) growth to slow to 6.6% in fiscal year 2026-27 (FY27), down from 7.6% in FY26, citing high crude and commodity prices, weaker global growth, and a below-normal monsoon. CPI inflation is projected to rise to 5.1%, up from 2.0% last year. Crisil warned that a prolonged closure of the Strait of Hormuz may keep oil prices high. It reviewed the Brent crude forecast to $90-95 per barrel, from $82-87 previously.
It cautioned that higher crude and gas prices, coupled with global supply chain disruptions, will strain the country’s growth. The manufacturing sector, heavily dependent on imports, is particularly vulnerable. Exports will be adversely impacted by weaker global demand and trade disruptions. It highlighted that a below-normal monsoon, worsened by El Nino, could hit agriculture and the rural economy, with kharif and rabi crop output at risk. The India Meteorological Department forecasts rainfall at 92% of the long-period average.
It further said that rising inflation from higher commodity prices and disrupted agriculture will strain household budgets and restrain consumption. Business investment may slow amid uncertainty from the West Asia conflict, which has already caused the largest energy shock on record and disrupted trade and supply chains. However, it noted that growth will be supported by fiscal measures, including the Centre’s capital expenditure push, GST rate rationalisation, and unconditional cash transfers by states.
