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India’s GDP growth to be at 6.6% in FY27 amid energy stress: S&P Global Ratings

24 Jun 2026 Evaluate

Amid the energy stress, expectations of a sub-par monsoon, and slowing global growth, S&P Global Ratings in its report titled 'Economic Outlook Asia-Pacific Q3 2026: AI-Exposed Markets To Outperform' has lowered India’s Gross Domestic Product (GDP) growth projection to 6.6 per cent for the current fiscal year ending March 2027 (FY27). The Indian economy recorded 7.7 per cent growth in the FY26 and 7.1 per cent in FY25. S&P's FY27 growth projection is in line with the RBI estimate of 6.6 per cent.

It said consumer inflation would be 0.5-0.6 percentage points higher in the third quarter in India, and it will rise to 5.1 per cent in FY27 as manufacturers pass on higher energy costs to consumers, alongside recent increases in prices of petrol, diesel, and cooking gas. Also, with the current account deficit on the rise and the rupee weakening, the authorities took measures to encourage foreign capital inflows. These measures have strengthened the rupee vis-a-vis the U.S. dollar somewhat.

S&P said the Asia-Pacific region's outlook is shaped by resilient global activity, energy market stress, and an AI-driven tech export boom. It noted that the impact of energy stress arising from the West Asia conflict is visible, as the industry faces a substantial rise in input costs and suppliers' delivery time. Also, higher fertiliser prices weigh on food production and raise food prices. It further said rising inflation is eroding purchasing power, thus depressing growth. Sharply higher fertiliser prices may weigh on food production and fuel food prices. 

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