ADB trims India’s FY27 growth projection to 6.6% from 6.9%

Despite this moderation, India remains the fastest-growing major economy globally

PTI New Delhi

The Asian Development Bank (ADB) on Thursday lowered India's GDP growth projection to 6.6% from 6.9% estimated earlier for the current fiscal year, citing concerns over higher energy prices fuelled by the Middle East crisis. Despite this moderation, India remains the fastest-growing major economy globally.

The Asian Development Outlook (ADO) for July 2026 maintains the growth forecast at 7.3% for FY2027. The downward revision for FY2026, which ends on March 31, 2027, reflects elevated energy prices that squeeze real incomes. Growth will be supported by policy interventions to attract foreign capital, fuel tax cuts, targeted credit support, strong services exports and public capital expenditure. 

The FY2027 growth forecast remains unchanged from April, underpinned by improved global conditions and export competitiveness gained through trade agreements. However, risks remain to the downside due to geopolitical tensions or weather-induced weakness in agriculture.

Regarding inflation, the ADO has raised its forecast to 5.2% from 4.5% projected in April. This revision reflects higher global energy prices from the Middle East conflict feeding through to fuel, transport and food costs. Food inflation is adding further pressure due to heatwaves and the fading of favourable base effects. 

The forecast for the following year is retained at 4%. Last month, the Reserve Bank of India (RBI) also revised its FY27 GDP growth forecast to 6.6% from 6.9%, while raising its inflation projection to 5.1%.  Meanwhile, the International Monetary Fund (IMF) expects the Indian economy to grow at 6.4% in FY2027 and 6.7% in FY2028.