India is expected to remain one of the world's fastest-growing major economies, with the Asian Development Bank (ADB) projecting GDP growth of 6.6 per cent in FY27 despite an increasingly challenging global environment.
In its latest outlook, the ADB said its revised forecast for FY27 remains above the International Monetary Fund's (IMF) most recent estimate of 6.4 per cent for the same period.
“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 ADB said.
The multilateral lender also left its FY28 growth projection unchanged at 7.3 per cent, maintaining the forecast it had released in April.
According to the report, India's medium-term economic prospects continue to be underpinned by improving global conditions and stronger export competitiveness resulting from trade agreements with several international partners.
The ADB said its downward revision to the FY27 growth estimate was primarily driven by elevated energy prices, which are expected to reduce household purchasing power and weigh on consumer spending.
The report also warned that the outlook faces downside risks from escalating geopolitical tensions and the possibility of weaker agricultural output due to adverse weather conditions.
On inflation, the ADB revised its FY27 forecast for India to 5.2 per cent while keeping its FY28 projection unchanged at 4 per cent.
Beyond India, the lender lowered its 2026 growth outlook for South Asia to 6.0 per cent from the 6.3 per cent forecast issued earlier. The revision reflects concerns over higher oil prices, rising freight costs and uncertainty surrounding remittance flows.
The ADB also trimmed its growth forecast for developing Asia and the Pacific in 2026 to 4.9 per cent from 5.1 per cent, citing the prolonged conflict in West Asia, which it said has disrupted energy supplies and global supply chains, increased production costs and slowed economic activity.
Despite these short-term pressures, the ADB said India's economic outlook remains among the strongest globally, supported by structural reforms, sustained public investment and resilient growth in services exports.
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