RBI Deputy Governor Poonam Gupta expects India’s economy to perform better than the central bank’s current projection.
A strong April-June quarter could push full-year GDP growth closer to 7%.
Highlights
- India’s FY27 GDP growth could come close to 7%, higher than RBI’s 6.7% forecast.
- Economists expect Q1 FY27 growth to remain between 6.9% and 8%.
- Poonam Gupta expects economic activity to remain resilient despite external challenges.
- She said India should aim for growth above 7.5% going forward.
- India’s balance of payments could turn positive during the current financial year.
- Foreign inflows could reach as much as $80 billion, according to estimates.
India’s economy could expand at a faster pace than currently projected by the Reserve Bank of India, with GDP growth potentially moving closer to 7% in the financial year ending March 2027, RBI Deputy Governor Poonam Gupta has said.
The central bank currently expects India’s economy to grow by 6.7% in FY27. However, Gupta believes a strong performance during the April-June quarter could lift the full-year growth rate above this projection.
Speaking at an event at the Madras School of Economics in Chennai, Gupta said expectations for the first quarter remain strong. Economists are currently projecting GDP growth for the April-June period in a broad range of 6.9% to 8%. Official GDP data for the quarter is expected to be released later this month.
A stronger-than-expected first quarter could help push India’s annual growth closer to the 7% mark, keeping the country among the fastest-growing major economies globally.
The positive outlook comes despite challenges including an inadequate monsoon and elevated energy costs. The economy has so far demonstrated resilience against these pressures, supporting expectations of sustained momentum.
Gupta also indicated that India should aim for an even higher growth trajectory in the coming years. She said growth of around 7.5% should be achievable despite external shocks and that the country should aspire to perform even better.
Her comments come at a time when the RBI is also closely watching inflation and other economic risks. Minutes from the central bank’s August monetary policy meeting showed that Gupta had raised the possibility of a rate hike later this year.
India’s external financial position is also expected to improve. Economists expect the country’s balance of payments to turn positive in FY27 after earlier projections pointed towards a deficit.
Foreign capital inflows could reach as much as $80 billion, supported by measures aimed at strengthening the rupee and attracting foreign currency deposits.
The improved economic outlook has strengthened optimism about India’s long-term growth prospects. Prime Minister Narendra Modi has reiterated the goal of turning India into a developed economy by 2047. Economists believe achieving that target could require sustained annual GDP growth of more than 8% for several years.
