A report by BofA Global Research on Thursday said <a href="https://www.mid-day.com/business/business-news/article/deloitte-projects-indias-gdp-to-grow-71-73-per-cent-in-fy27-23655416" target="_blank" rel="none noopener">India's gross domestic product (GDP) is expected to clock 7.4 per cent</a> during this current fiscal year, and 7.5 per cent during FY28, according to news agency IANS.
It expects the GDP to grow 7.7 per cent during the first half of the current fiscal year.
"We expect the H1 (first half) FY27 GDP growth to now average at 7.7 per cent YoY (year on year), modestly lower than 8.1 per cent YoY in H2 FY26. We continue to project GDP growth for the full year at 7.4 per cent YoY for FY27 but see modest upside risks to our GDP growth projections,&rdquo; said the report.
The report said the nominal GDP growth estimate for the second quarter of the current financial year is around 13.9 per cent year on year, which will be the highest nominal growth print in almost four years.
"We expect the growth momentum to hold in the next fiscal year and keep our forecast unchanged for FY28 at 7.5 per cent YoY," it said.
<h2>Economic activity remains strong</h2>
The report said the growth indicates resilient economic momentum despite global supply-side challenges from the West Asia disruption, monsoon deficiency, and weakness in the farm sector.
The strong<a href="https://www.mid-day.com/business/business-news/article/indias-manufacturing-sector-growth-hits-7-month-high-to-551-in-september-hsbc-pmi-23652833" target="_blank" rel="none noopener"> industrial and manufacturing activity</a>, along with the robust consumer demand and credit growth, is expected to support the overall growth. It noted that the auto sales, power demand, and freight activity remain strong, while bank credit growth continues at around 20 per cent.
Manufacturing is expected to grow around 12 per cent, supported by stronger industrial activity, with IIP growth rising to 7.3 per cent in Q3 from 6.2 per cent in Q2, it said.
<h2>Risks to growth</h2>
However, it flagged the crude oil prices as a risk to the growth. It noted that the oil prices have moderated recently but the geopolitical backdrop remains uncertain. If oil prices remain elevated in 2027, it could impact the growth. India is the third largest importer and consumer of crude oil.&nbsp;
It noted that elevated crude oil prices, geopolitical uncertainty, potential El Nino-related rural weakness, and further RBI rate hikes could pose downside risks to growth.
The Reserve Bank of India (RBI) had <a href="https://www.mid-day.com/business/business-news/article/rbi-mpc-rbi-hikes-repo-rate-to-55-per-cent-rules-out-rate-cuts-in-near-term-23653790" target="_blank" rel="none noopener">increased its benchmark lending rate or repo rate by 25 basis points to 5.5 per cent</a> in October. RBI Governor Sanjay Malhotra had said rate cuts were off the table in the near term. The apex bank had changed its policy stance to 'calibrated tightening' from neutral.
"Given the current conditions, rate cuts are off the table in the near term and policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook," Malhotra had said.
(With inputs from IANS)

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The strong industrial and manufacturing activity, along with the robust consumer demand and credit growth, is expected to support the overall growth

BofA Global Research projects India's FY 27 GDP growth at 7.4 per cent

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