BMI, a Fitch group company, has said that India's Gross Domestic Product (GDP) growth is likely to slow to 6.6% in the current fiscal (FY27) as compared to 7.7 per cent in FY26. It said the slowdown could be driven by weaker investments and consumption growth along with trade-related disruptions stemming from the West Asia crisis. BMI's forecast is in line with the Reserve Bank of India's (RBI) projection of 6.6% growth for FY27.
BMI attributed the expected moderation in growth rate this fiscal to three factors. First, the impact of last year's GST reforms on domestic consumption is likely to fade. Second, higher price inflation which BMI expects to hit 5.3 per cent in FY27 will hinder consumption growth amid disruption at Strait of Hormuz. Thirdly, BMI expects investment growth to slow during the fiscal year. It said ‘this slowdown is not due to our new forecast of accumulative 50 basis points (bps) rate hike by the RBI in FY27, since the effect on growth will primarily be felt during FY28’.
BMI expects the rupee to trade at around 95.1 against the US dollar during the current calendar year. It said the currency's depreciation from its 87 average level in 2025 will support export competitiveness, and help offset some of the economic impact arising from the Iran conflict's terms-of-trade shock. It said the GST reforms implemented in September 2025 caused a consumption boom in December quarter FY26. Thereafter, consumption growth fell by 1.1 percentage points to 7.1 per cent y-o-y in March quarter FY26.
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