After Q1 GDP surprise, economists raise FY27 growth forecasts beyond 7%

After a 7.8% growth print for the April-June quarter, economists have significantly revised upward their forecasts for India's fiscal year 2026-27. The consensus growth prediction has risen to 7.2% from the previous 6.7%, according to estimates of 10 economists. This marks the fourth consecutive year of over 7% growth, with the full-year 2026-27 print of over 7% following the 7.3% in 2023-24, 7.2% in 2024-25, and 7.8% in 2025-26.

ANZ economists Dhiraj Nim and Sanjay Mathur noted that the April-June growth number "marked the 12th consecutive quarter of positive surprise relative to market expectations". State Bank of India's Group Chief Economic Adviser, Soumya Kanti Ghosh, raised his forecast by 70 basis points to 7.3%. Economists at Morgan Stanley raised their growth forecast to 7.3% after the strong April-June data.

While some economists chose to keep their forecasts at 7%, they acknowledged an upside risk. ICICI Securities Primary Dealership economists saw five risk factors for growth, including unfavorable base effects, crude oil prices, and weaker foreign demand. The Reserve Bank of India's July-September forecast remains at 6.4%, followed by 6.5% for October-December, 6.8% for January-March 2027, and a projected 7.3% for April-June 2027.

The next Monetary Policy Committee meeting is scheduled for October 5-7, where the central bank is expected to raise its growth prediction for 2026-27 based on the strong GDP data.