{
  "id": 4395460,
  "title": "India's FY27 growth seen at 7-7.2% as capex, domestic demand offset global headwinds: EY",
  "url": "https://urgent.news/2026/08/30/indias-fy27-growth-seen-at-7-7-2-as-capex-domestic-demand-offset",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-30T09:20:27.000Z",
  "source": {
    "name": "The Economic Times - Economy",
    "slug": "the-economic-times-economy",
    "url": "https://economictimes.indiatimes.com/news/economy/indicators/indias-fy27-growth-seen-at-7-7-2-as-capex-domestic-demand-offset-global-headwinds-ey/articleshow/133626713.cms"
  },
  "original_language": "en",
  "account": "New Delhi: India's real GDP growth for FY27 is expected to stay robust at 7% to 7.2%, according to a recent report by EY. This growth is attributed to strong domestic demand and sustained government emphasis on capital expenditure, despite global headwinds like geopolitical uncertainty, high crude oil prices, and a challenging global trade climate.\n\nEY highlights that industrial activity in India is improving, with the Index of Industrial Production (IIP) growing at a 23-month high of 7.3% in June 2026. The first-quarter average industrial growth in FY27 reached 5.7%, the highest in eight quarters. Manufacturing output expanded by 7.8%, led by sectors such as electrical equipment, motor vehicles, textiles, and food products.\n\nHowever, high-frequency indicators suggest a slight slowdown in momentum. The manufacturing Purchasing Managers' Index (PMI) dropped to 53.5 in July from 54.2 in June, while the services PMI fell to 53.3 from 57.4. Both indices remained above the 50 threshold, indicating ongoing expansion. Gross bank credit growth accelerated to a 25-month peak of 18.6% in June, reflecting continued financial support for economic activity.\n\nOn the fiscal front, government capital expenditure surged to 23.7% in Q1FY27, up from a contraction of 23.3% in the fourth quarter of FY26. Meanwhile, the fiscal deficit remained within the targeted 18.2% of the annual budget. EY believes that this stronger capital expenditure push will bolster demand, thereby improving real GDP growth prospects.\n\nInflation poses a key risk for India's economy. Consumer price inflation was recorded at 4.4% in July, while wholesale price inflation remained stubbornly high at 9.8%, mainly due to rising mineral oil, food article, metal, chemical, and fuel prices. EY anticipates that elevated wholesale price inflation could push nominal GDP growth above the government's budgeted 10.04% target, which could benefit revenue receipts and enable continued capital expenditure while keeping the fiscal deficit target intact.\n\nExternal risks loom large, with EY pointing out that higher energy costs and weaker global demand could strain India's exports. The report suggests that India's current account deficit could widen to 1.9% of GDP in FY27, as per OECD projections. Nonetheless, EY sees potential to bolster India's external position through import substitution and enhanced domestic value addition. A focused strategy targeting 1,272 products may substitute approximately US$189 billion of imports, while export promotion alongside domestic manufacturing could help alleviate supply-side vulnerabilities in the medium term.",
  "summary": "India's real GDP growth is likely to remain resilient at 7 per cent-7.2 per cent in FY27, supported by buoyant domestic demand and continued government focus on capital expenditure, while nominal GDP growth could reach 12.5 per cent-13 per cent, according to recent report by EY. The firm said economic growth prospects remain relatively strong despite geopolitical uncertainty, elevated crude oil…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}