India's economic momentum strengthens, GDP growth forecast for FY27 raised to 77.4%

India's economy is growing at a strong pace and growth is expected to remain high in the coming years. Chief Economic Advisor (CEA) V. 

Anantha Nageswaran stated that the country's growth momentum remains intact and raised the GDP growth forecast for fiscal year 2027 (FY27) to 7.4% from 7%.

GDP growth was 7.8% in the third quarter

India's GDP growth was recorded at 7.8% in the third quarter of fiscal year 2026. 

This is slightly lower than the previous quarter's 8.4%, but better than market estimates of 7.4%. This is the first time GDP figures have been released based on the new base year of 2022-23.

Newly prepared economic data

The Ministry of Statistics and Programme Implementation (MoSPI) has revised the national income calculation system, adopting the double deflation method and including modern economic sectors, in an effort to present a more accurate picture of the economy.

Strong domestic demand became a major strength

Nageshwaran said the economy's strength was primarily driven by broad-based economic activity and strong domestic demand. 

Indicators such as two-wheeler sales suggest consumer spending remains strong. He also said that nominal GDP per capita growth could reach 9%.

7.6% growth estimated in FY26

According to revised figures, India's economic growth is expected to be around 7.6% for the full fiscal year 2026. Analysts believe this will ensure India maintains its position among the world's fastest-growing large economies.

Relief from inflation and supply side

A good rabi harvest, adequate food stocks, and easing global commodity prices are expected to keep inflation under control, supporting economic stability.

Expectations from trade agreements and investments

Progress in ongoing trade negotiations with the United States and the European Union is expected to boost exports and foreign investment. 

The government is maintaining fiscal discipline and plans to keep the fiscal deficit around 4.5% of GDP in 2025-26. Overall, signs of strength in both consumption and investment suggest that the outlook for the Indian economy remains positive going forward.