NEW DELHI: S&P Global on Wednesday projected India’s economy to expand 6.6 per cent in FY27, citing rising energy costs, slower global growth and the likelihood of a below-normal monsoon as key risks to economic activity.
In its latest Asia-Pacific Economic Outlook, the ratings agency said India’s real GDP growth is expected to slow from an estimated 7.7 per cent in FY26 to 6.6 per cent in the current fiscal. The forecast matches the Reserve Bank of India’s revised growth estimate announced earlier this month.
The agency said persistent energy stress, weaker external demand and weather-related uncertainties are likely to weigh on domestic growth in the coming quarters.
It also projected consumer price inflation at 5.1 per cent in FY27, driven by higher energy costs and recent increases in administered fuel prices, including petrol, diesel and cooking gas. Manufacturers are expected to pass on part of the higher input costs to consumers, keeping price pressures elevated.
Given the inflation outlook, S&P Global expects the Reserve Bank of India to raise policy rates during the second half of the fiscal year.
The report also noted that authorities have introduced measures to attract foreign capital as the current account deficit widens and the rupee faces depreciation pressures. According to the agency, these steps have helped provide some support to the domestic currency against the US dollar.
For the broader Asia-Pacific region, S&P Global said economies benefiting from strong artificial intelligence-led technology exports have seen improved growth prospects. Taiwan, South Korea, Vietnam, Singapore, Malaysia, Thailand, Japan and mainland China are among the economies expected to benefit from the ongoing technology export cycle.
However, the agency cautioned that elevated energy prices remain a common challenge across the region, particularly for economies dependent on energy imports from West Asia. While governments have limited the pass-through of higher global fuel prices, rising production costs continue to add to inflationary pressures.
S&P Global said economic activity across most Asia-Pacific economies remained resilient in the first quarter of 2026, supported by exports and domestic demand. Growth, however, fell short of expectations in the Philippines amid energy disruptions and weaker public infrastructure spending, while Australia also recorded softer-than-expected growth.
Source: The Financial Express
