UOB Boosts India’s GDP Forecast for FY27 Amid Strong Economic Growth
UOB’s economists have updated their forecast for India’s economic growth, raising the FY27 Gross Domestic Product (GDP) estimate from 6.8% to 7.2%. This adjustment comes after a surprising economic growth of 7.8% year-on-year in the first quarter of FY27, which surpassed initial expectations.
In addition to the GDP forecast, UOB has also increased its inflation projection for the same period. The new headline inflation rate is now set at 5.2%, up from the previous estimate of 5.0%. This change is largely due to rising food prices, increased costs in services and energy, and the impact of adverse weather conditions on agriculture. Thankfully, the effects of these challenges will be somewhat tempered by substantial public foodgrain reserves and government subsidies.
UOB noted, “The strong growth in the first quarter reinforces our decision to raise our GDP outlook. We are also anticipating several months of price increases due to weather-related supply issues, though our food reserves should help alleviate some of these pressures.”
Moreover, economists warn that if there are no further increases in interest rates, India’s real interest rate could slip into negative territory, especially with inflation expected to rise above 6% year-on-year as early as November 2026.
This revised outlook reflects the dynamic and challenging nature of the current economic landscape in India.
