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Informist, Friday, Apr. 10, 2026

 

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--ADB raises India FY27 GDP growth forecast to 6.9% from 6.5?rlier 
--ADB projects India's GDP to grow 7.3% in FY28 
--ADB: India growth seen easing in FY27 from FY26 on high global uncertainty 
--ADB: India growth seen easing in FY27 from FY26 on high energy prices 
--ADB: External pressures to weigh on India exports, inflation in near term 
--ADB: Growth in India seen rising in FY28 on domestic demand, public invest 
--ADB raises India FY27 CPI inflation forecast by 30 bps to 4.5% 
--ADB projects India FY28 CPI inflation at 4.0% as supply conditions improve 
--ADB: See India CAD widening in FY27 on high crude oil imports 
--ADB: See India CAD narrowing in FY28 as energy prices normalise 

 

MUMBAI – Asian Development Bank has projected India's GDP to grow 6.9% in the current financial year, 40 basis points higher than estimated earlier but slower than the 7.6% growth in FY26. The multilateral bank expects the war in West Asia and high energy prices to weigh on India's economic activity and exports and push inflation higher in the near term.

 

"Despite external challenges, India's growth outlook remains resilient, aided by supportive fiscal and monetary policies and regulatory reforms aimed at enhancing labour flexibility and integration with global value chains," ADB's country director for India, Mio Oka, said in a release. "Over the medium term, investments in clean energy, power sector reforms, and measures to boost manufacturing competitiveness and attract investment will sustain growth."

 

Growth is seen moderating this year mainly because of heightened global uncertainty caused by the war in West Asia, higher energy prices, and volatile trade and financial conditions, ADB said in its Asian Development Outlook for April. Growth is expected to pick up in FY28, supported by strong domestic demand, continued public investment, and an improving external environment, ADB said.

 

ADB's forecast for growth in FY27 is in line with the Reserve Bank of India's projection of 6.9%. On Wednesday, the World Bank also raised its forecast for India's GDP growth in FY27 by 10 basis points to 6.6%.

 

Domestic demand will remain the main driver of growth in FY27 and FY28, ADB said. Private consumption is also likely to remain strong in FY27, supported by rising real incomes, steady rural demand, and easing monetary conditions, the bank said. The waning impact of earlier tax cuts and increasing inflation could moderate the pace of private consumption, it added. It is expected to strengthen in FY28, "aided by an expected once-in-a-decade revision to government salaries and pensions," ADB said.

 

ENERGY SHOCK

ADB projects retail inflation in India to rise to 4.5% in FY27 because of higher energy and food prices. Before the outbreak of the US-Israel war on Iran on Feb. 28, ADB had projected inflation to average 4.2% in FY27, higher than around 2% in FY26. CPI inflation is seen moderating to 4.0% in FY28 as supply conditions improve, ADB said. 

 

Higher oil prices are also likely to increase India's imports and widen the current account deficit this year, ADB said. As with inflation, the current account deficit is also seen narrowing in FY28 due to an expected normalisation of global energy markets. Higher exports, reflecting recent trade agreements with key partners, including the European Union, the US, and New Zealand, should support the narrowing of India's current account deficit in FY28, ADB said.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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