Easing Energy Prices To Support India’s 6.6–6.8% GDP Growth Outlook In FY27: EY

New Delhi, Jun 27 (KNN) India's economy is expected to grow at 6.6 to 6.8 per cent in real terms in FY27, with nominal GDP growth projected at 12.5 per cent, according to EY Economy Watch. 

The report, released on Friday, said India continues to demonstrate strong economic resilience despite external uncertainties, underpinned by robust domestic fundamentals and sustained private sector activity, PTI reported.

A gradual normalisation of global energy markets is expected to ease supply-side pressures, improve cost conditions and support both growth and inflation outcomes during the year. 

If global crude prices settle at relatively lower levels and shipments through the Strait of Hormuz normalise following recent geopolitical disruptions, the positive momentum in India's growth trajectory is likely to be restored, the report said.

Inflation and External Sector

CPI inflation is projected at around 4.5 per cent, supported by moderating commodity prices and improving supply conditions. The current account deficit is expected to remain contained at 1.5 per cent of GDP, aided by a moderation in global energy prices and improved external conditions. The government's fiscal deficit is projected at 4.4 per cent of GDP.

Domestic Drivers Remain Intact

High-frequency indicators continue to reflect underlying economic strength, with healthy manufacturing and services activity, steady credit growth, improving industrial output and resilient automobile demand. 

Domestic consumption, investment and services sector performance are expected to remain central to economic expansion over the medium term.

The report also highlighted India's petroleum refining ecosystem as a key structural strength, enhancing energy security, supporting petroleum product exports and helping mitigate external vulnerabilities. 

It called for increased focus on infrastructure development, supply chain resilience and strategic preparedness to strengthen India's ability to navigate future geopolitical and economic uncertainties.

(KNN Bureau)