Stories
India GDP Growth Forecasts Upgraded by Major Global Agencies Following Strong Q1 Performance
- •Global agencies including Moody s, OECD, Fitch, ADB, and S&P have raised India FY27 growth forecasts following a robust 7.8 percent GDP growth rate in Q1.
- •Moody s led the upgrades with a 100 basis point increase to 7 percent, while OECD raised its forecast to 7.1 percent and Fitch to 6.9 percent.
- •Sectoral data shows strong growth in financial, real estate, IT, and professional services at 12.1 percent, and manufacturing at 9.2 percent.
- •Agencies have flagged downside risks such as potential high energy prices from the West Asia conflict and food inflation risks from El Niño.
- •New investment announcements surged to Rs 19.8 lakh crore in the June quarter, reflecting a strong recovery in the investment landscape.
Key Questions Answered
Following a Q1FY27 GDP growth rate of 7.8 percent, several global agencies increased India's growth forecasts. Moody's led with a 100 bps increase to 7 percent, the OECD raised its forecast by 80 bps to 7.1 percent, Fitch increased it by 50 bps to 6.9 percent, and both ADB and S&P raised their projections by 40 bps to 7 percent.
Sectoral expansion drove the positive outlook, with financial, real estate, IT, and professional services growing by 12.1 percent in Q1 compared to 8.8 percent previously. Manufacturing expanded by 9.2 percent, electricity and utilities rebounded to 8.9 percent, and construction rose by 7.7 percent, though mining shrank and agriculture slowed.
Agencies highlighted that the West Asia conflict could keep energy prices high and that El Niño weather patterns might stoke food inflation. Additionally, the current account slipped to a $4.2 billion deficit, and the trade deficit expanded to $88.3 billion in Q1FY27.
