India's economy expanded 7.8% from a year earlier in April-June, the Ministry of Statistics and Programme Implementation said, but DBS Bank expects growth to slow in the second half of fiscal 2027.
DBS senior economist Radhika Rao projected 7.3% real GDP growth for the full fiscal year in a Sept. 22 research note. India's fiscal 2027 runs from April 2026 through March 2027. In an interview published Oct. 26, NDTV Profit reported that Rao expected full-year growth to exceed 7%; its account gave no new point forecast.
Rao cited rising costs for businesses and uncertainty over consumer demand in the interview, NDTV Profit reported. The outlet also reported her concern that higher prices could strain households' purchasing power. Provisional figures from the statistics ministry put September consumer-price inflation at 5.54% from a year earlier, including a 7.74% rise in food prices.
DBS expects expensive energy to affect activity with a delay as tighter policy weighs on growth. Its September note also points to fading favorable base effects from last year's indirect-tax cuts: those cuts made earlier year-over-year comparisons more favorable, an effect DBS expects to diminish in the second half.
The Reserve Bank of India projected 7.1% growth for fiscal 2027 on Oct. 7, 0.2 percentage point below DBS's September forecast. It projected growth of 6.9% in October-December and 6.8% in January-March. The central bank also raised its policy repo rate by 25 basis points to 5.50%.
Both institutions expect full-year growth above 7%, though their forecasts differ and each points to a slower finish. The next official reading will cover July-September, the quarter between the 7.8% start and the two later quarters in the central bank's forecast. The statistics ministry has scheduled that GDP estimate for Nov. 30.
