New Delhi, December 17 (IANS). India’s gross domestic product (GDP) growth rate may be 7.5 percent in the current financial year FY 2026. Whereas in the financial year 2027 it is estimated to be around 7 percent. The main reason for this is the strong demand within the country and the stable condition of the economy. This information was given in a report released on Wednesday.
According to the report of CareAge Ratings, inflation is expected to remain under control in the meantime. The average CPI inflation may be around 2.1 percent in fiscal year 2026, whereas after this it may normalize to around 4 percent in fiscal year 2027.
According to the report, India’s current account deficit (CAD) is likely to be around 1 percent of GDP in both fiscal years 2026 and 2027.
The rating agency says that the central government will meet the fiscal deficit target of 4.4 percent in FY 2026. After this, it may come down to 4.2 to 4.3 percent in the financial year 2027.
The report said that the 10-year government bond yield is expected to be in the range of 6.4 to 6.6 percent by the end of FY 2026, while the rupee may remain around 89 to 90 against the dollar by the end of FY 2027.
Rajni Sinha, Chief Economist, CareAge Ratings, said that India’s economic situation remains strong and positive as we move towards FY 2027.
He said that even if some economic uncertainties persist in the world, India’s economy can still register a good growth of 7 percent in FY 2027.
He further said that factors like low inflation, low interest rates and low tax burden will boost the pace of growth. Additionally, if a trade agreement is reached between India and the US, it could further boost growth. There are signs of gradual improvement in capital investment in India.
According to the report, foreign investors are seriously looking at India’s growth prospects. Its effect is visible in the form of increase in foreign direct investment (FDI). Investment has increased especially in new areas like electric vehicles (EV), renewable energy, electronics, data centers and AI. Also, reforms like new labor law will further strengthen the confidence of domestic and foreign investors.
According to the report, global economic conditions are still challenging and the world’s economic growth is expected to remain below pre-Corona levels. Despite this, India’s economic growth is likely to remain better than that of other countries.
–IANS
Durgesh Bahadur/ABS