BofA Global Research Increases India's FY27 GDP Growth Forecast to 7.4%

Synopsis

BofA Global Research has upgraded India's GDP growth forecast for FY27 to 7.4%, citing a more favorable trade environment and supportive fiscal policies. This adjustment signifies a positive outlook for private consumption and investment.

Key Takeaways

BofA Global Research maintains FY26 GDP growth at 7.6% .

FY27 GDP growth forecast increased to 7.4% .

Positive outlook due to improved trade conditions.

Importance of monetary policy in supporting growth.

Notable shifts in sectoral GDP composition.

New Delhi, Feb 27 (NationPress) BofA Global Research has confirmed its FY26 GDP growth projection for India at 7.6 percent, while also increasing the FY27 GDP estimate from 6.8 percent to 7.4 percent. This adjustment indicates a more favorable trade environment and a relatively accommodating fiscal and monetary policy.

The adjustment reflects a reduction in growth risks and suggests resilience in both private consumption and investment.

“Despite rising commodity prices, we believe that there is still potential for the monetary policy to remain supportive,” noted BofA Global Research, indicating that the updated GDP figures will serve as a crucial indicator for the Reserve Bank of India (RBI) in shaping future policy decisions.

“Given the robust nature of these figures alongside stabilizing inflation, we anticipate that the RBI will maintain a prolonged pause on interest rates while ensuring liquidity conditions to promote sufficient credit flow,” they added.

With the release of the new Consumer Price Index (CPI) and GDP data, “we look forward to the RBI's evaluation of growth and inflation in the upcoming April Policy, particularly in their monetary policy report, as we analyze the data meticulously in the coming weeks.”

The updated GDP data reveals notable changes in sectoral composition, with the secondary sector remaining relatively stable, accounting for 26 percent of GDP, while the primary sector has seen modest growth at the expense of the services sector.

In terms of growth rates, the secondary sector has consistently demonstrated a higher growth rate, while the tertiary sector has outperformed in growth.

“Overall, the investment share has seen a slight reduction in real terms, with private consumption also experiencing a modest decline in its share. Marginal discrepancies have increased, which we believe reflects the absence of informal sector data necessitating an annual survey,” the report stated.

The GDP series utilizes data from new sources such as enhanced GST filings, e-Vahan data, and payment transaction data, among others.

In addition to new data sources, significant changes have been made to the constant price estimates, employing the double deflator method for manufacturing, along with volume/single extrapolation methods where previously single deflation was applied, according to the report.

Point of View

BofA's revised GDP growth forecasts for India indicate a resilient economy facing a less challenging trade backdrop. The adjustments in growth rates highlight the importance of policy support in sustaining economic momentum, particularly in private consumption and investment sectors.

NationPress

12 May 2026

Frequently Asked Questions

What is the new GDP growth forecast for FY27 in India?

The new forecast for India's FY27 GDP growth is 7.4%, up from the previous estimate of 6.8%.

Why did BofA Global Research revise the GDP growth forecast?

The revision reflects a less adverse trade environment and reasonably supportive fiscal and monetary policies.

How does the updated GDP series impact the Reserve Bank of India?

The revised GDP figures will serve as a key indicator for the Reserve Bank of India in determining future monetary policy.

What sectors are showing growth according to the new GDP data?

The secondary sector has maintained stable growth, while the primary sector has gained modestly, affecting the services sector.

What new data sources were used for the GDP calculations?