Govt sees downside to growth estimates
The Indian Ministry of Finance has cautioned that there is a considerable downside to the country's upgraded growth forecast for FY27 due to the conflict in West Asia. The ministry has upgraded the real GDP growth estimate for FY27 to a range of 7.0% to 7.4%, but notes that external shocks pose downside risks to growth through higher input costs and supply constraints.
The Ministry of Finance has cautioned that India's upgraded growth forecast for FY27 is at risk due to the conflict in West Asia. The ministry upgraded the real GDP growth estimate to 7.0% to 7.4% on February 27. However, the near-term outlook remains uncertain due to external shocks. The current account deficit is also expected to widen significantly in FY27. Foreign exchange reserves remain comfortable, providing cover for over 11 months of goods imports. The government's interventions in energy diversification and inflation management will support the economy's ability to absorb disruptions.
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