India’s Economy to Grow at 6.6% in FY27 as Inflation Risks Persist: S&P Global

S&P Global has projected India’s economic growth at 6.6% for the financial year ending March 2027, lower than the estimated 7.7% growth in FY26, as per news reports.  

The forecast comes at a time when higher energy costs, weather-related risks, and weaker global demand are expected to weigh on economic activity. 

The estimate matches the Reserve Bank of India’s latest growth projection. Earlier this month, the central bank lowered its FY27 growth forecast to 6.6% from 6.9%, citing uncertainties linked to global markets, supply chains, and weather conditions. 

India’s Inflation May Move Above 5% 

The ratings agency expects consumer inflation to rise to 5.1% during the current fiscal year. According to the report, rising energy prices are likely to increase production and transportation costs, with some of the burden being passed on to consumers. 

It also pointed to recent increases in administered fuel prices, including petrol, diesel, and cooking gas. S&P Global said inflationary pressures could lead to a policy rate increase in the second half of the financial year. 

Rupee and External Accounts 

The report noted that India’s current account deficit has been widening, while the rupee has remained under pressure against the US dollar. In response, authorities have introduced measures aimed at attracting foreign capital inflows. 

These steps have provided some support to the domestic currency. However, external risks continue to be linked to global growth trends, commodity prices and financial market conditions. 

Asia-Pacific Economy Holds Up 

Across Asia-Pacific, economic activity remained relatively steady during the first quarter of 2026. Growth met or exceeded expectations in most economies, supported by exports and domestic demand. 

S&P Global revised growth forecasts upward for economies benefiting from strong demand for technology exports linked to artificial intelligence. Taiwan, South Korea, Vietnam, Singapore, Malaysia, Thailand, Japan and China were among the economies cited in the report. 

Energy Costs Remain a Concern 

The agency said higher energy prices continue to affect many economies across the region. Several countries depend heavily on energy supplies from West Asia, making them vulnerable to price increases and supply disruptions. 

Although governments have taken steps to limit the impact on consumers, rising fuel costs continue to feed into the prices of goods and services across the economy. 

Read More: India and US Engage in High-Level Trade Talks on Bilateral Agreements! 

Conclusion 

S&P Global expects India’s growth rate to moderate in FY27, while inflation and energy costs remain key areas to watch during the year. 

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