Deloitte India Forecasts Stronger Economic Growth In Second Half Of FY27

New Delhi, Jul 20 (KNN) Deloitte India has projected India's economy to grow between 6.5 percent and 6.8 percent in FY 2026-27, with economic activity expected to strengthen in the second half of the fiscal, supported by festive demand, monetary easing and improving global conditions.

In its latest Economic Outlook report, the consultancy said India's economy entered 2026 with strong macroeconomic fundamentals but faced increased global uncertainty following geopolitical tensions in West Asia, which disrupted shipping routes, increased commodity price volatility and weakened investor sentiment.

Global Risks Weigh On Outlook

According to the report, the geopolitical developments widened India's trade deficit, triggered sustained capital outflows and contributed to a sharp depreciation of the rupee against the US dollar.

The report follows the Reserve Bank of India's decision to lower its FY27 GDP growth projection to 6.6 percent from 6.9 percent, reported PTI.

Festive Demand, Policy Support To Aid Recovery

Deloitte India Economist Rumki Majumdar said growth is likely to remain moderate during the first half of the fiscal before gaining momentum later in the year.

She said festive demand, monetary easing and gradual stabilisation in global conditions are expected to support stronger economic activity in the second half.

FTAs To Strengthen Medium-Term Growth

Despite near-term challenges, the report expressed optimism about India's medium-term growth prospects, citing the country's efforts to conclude Free Trade Agreements (FTAs) with major global markets.

It noted that greater market access through FTAs should be complemented by stronger industrial policies, world-class infrastructure, improved domestic supplier ecosystems, simplified regulatory compliance and continued investments in innovation and skills to enhance domestic value addition.

Inflation Remains A Key Concern

The report identified inflation as a major risk to the growth outlook, driven by higher prices of crude oil, fertilisers, essential minerals and edible oils, along with the impact of a weaker rupee.

It also cautioned that a weak monsoon could further increase food prices, given that food accounts for nearly 46 percent of India's Consumer Price Index (CPI) basket.

According to the report, policymakers will need to balance inflation management with fiscal discipline, avoiding excessive reliance on subsidies while maintaining macroeconomic stability.

(KNN Bureau)