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Informist, Wednesday, Sept. 23, 2026

 

NEW DELHI – The Asian Development Bank Wednesday raised its forecast for India's GDP growth in 2026-27 (Apr-Mar) to 7.0% from 6.6% projected earlier, "despite heightened geopolitical tensions and high commodity prices." Growth is likely to be supported by "resilient consumption, healthy investment, and strong services exports, which are expected to offset the drag from higher energy costs and a weaker monsoon," the multilateral development bank said. The ADB sees risks to its outlook from "geopolitical tensions and the impact of El Nino." 

 

The ADB has, however, cut its growth forecast for FY28 to 7.1% from 7.3?rlier due to the base effect of stronger growth in FY26, according to its 'Economic Trends and Prospects: South Asia' report for September.

 

S&P Global Ratings and Moody's have also forecast the Indian economy to grow 7.0% in FY27. The Indian economy expanded 7.8% in FY26 under the new GDP series, which uses FY23 as the base year. In the first quarter of FY27, the economy grew 7.8%.

 

India's headline inflation is forecast at 5.0% in FY27, down from 5.2% projected earlier, as tax cuts are expected to limit the pass-through of higher global energy prices to retail prices. The ADB maintained its FY28 inflation forecast for India at 4.0% as energy prices moderate and agricultural supply normalises. I

 

ADB sees India's current account deficit widening moderately in FY27 before narrowing in FY28, driven by lower oil prices and new trade agreements. "The country's external position is robust, helped by policy measures to attract capital flows," ADB said.

 

"For South Asia, the growth forecast for this year is revised up to 6.4% from 6.0% in July, driven by strong public investment and firm export growth in India," ADB said. The artificial intelligence boom has acted as a "countervailing force", supporting investment growth in India, with global demand for advanced microchips, electronics, and computing infrastructure boosting its net exports, it said. 
 

The multilateral funding agency sees economic growth in developing Asia and the Pacific to moderate to 5% in 2026 before edging up to 5.1% in 2027. The region grew 5.5% last year, it said. "The region has remained resilient, but the risks are growing," ADB President Masato Kanda said.

 

"A strengthening El Nino with drier conditions means smaller harvests and reduced hydropower, pushing food and energy prices higher, and hitting the most vulnerable the hardest," he said. This calls for governments to prepare to safeguard people most exposed to the prolonged energy crisis and renewed risks in financial markets, Kanda added.  End

 

Reported by Radhika Tiwari

Edited by Saji George Titus

 

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