ADB Revises Down India’s Growth To 6.6 pc In FY27
Growth will be supported by policy interventions to attract more foreign capital, as well as fuel tax cuts, targeted credit support, strong services exports, and public capital expenditure
Chennai: After the IMF, the Asian Development Bank also revised down India GDP growth forecast to 6.6 per cent against 6.9 per cent projected in April, due to elevated energy prices.
“India’s GDP growth forecasts are revised down to 6.6% for FY2027 and maintained at 7.3% for FY2028. The FY2027 forecast is lowered from 6.9 per cent projected in April, reflecting elevated energy prices, which squeeze real incomes,” ADB said. IMF in its July projections also had revised down India’s growth for the year to 6.4 per cent.
Growth will be supported by policy interventions to attract more foreign capital, as well as fuel tax cuts, targeted credit support, strong services exports, and public capital expenditure.
The FY2028 growth forecast remains unchanged from April, underpinned by improved global conditions and export competitiveness gained through trade agreements with various partners. However, risks tilt to the downside driven by heightened geopolitical tensions, or weather-induced weakness in agriculture.
India’s FY2026 inflation forecast is revised up to 5.2 per cent, driven by higher oil prices and a weaker rupee, with food inflation adding further pressure from heatwaves and fading of favourable base effects. Wholesale price inflation in India recorded a steep increase to 9.7 per cent in May, a 43-month peak.
The FY2028 inflation forecast is retained at 4 per cent as fuel and food prices normalize, supported by favourable base effects.
ADB finds that the Section 301 tariffs proposed in June by the US would modestly raise developing Asia Pacific’s tariff burden, with uneven effects across subregions. India will also be affected by these tariffs.
The Middle East conflict is expected to weigh more heavily on not just India but the developing Asia and the Pacific as well. The growth will moderate to 4.9 per cent this year, down from 5.5% in 2025. Inflation is projected to rise further from 3.6 per cent to 4.3 per cent.
