India’s Economic Outlook Brightens Further, S&P Global Upgrades FY27 GDP Growth Estimate To 7 Per Cent

New Delhi: The agency said India’s economy expanded faster than expected during the June quarter, prompting the 40-basis-point upgrade for the year ending March 31, 2027.

Official data showed India’s real GDP grew 7.8 per cent year-on-year in Q1 FY27. The stronger performance has encouraged several institutions to revise their growth estimates upwards.

Industrial production, domestic consumer spending, merchandise exports and public capital expenditure were identified as the main drivers behind the improved outlook.

Growth May Moderate In Second Half

Despite the upgrade, S&P expects economic momentum to soften during the second half of FY27.

Benefits from GST rationalisation and income-tax reductions could gradually fade, reducing support for household consumption and business activity.

Monsoon And Food Inflation Risks

Weather conditions remain a key economic risk. Cumulative rainfall during the current monsoon season was 15 per cent below normal as of September 9, 2026.

Weak rainfall could affect agricultural output and increase food inflation, making farm production and consumer prices important variables for policymakers and investors.

Asia-Pacific Growth Remains Resilient

Emerging market economies recorded average annual growth of 5.2 per cent during the second quarter.

S&P expects the Asia-Pacific economy to expand 4.6 per cent in 2026, an upward revision of 0.2 percentage points. Regional growth is projected at 4.4 per cent in 2027, supported by technology exports and accommodative macroeconomic policies.

China’s real GDP growth is forecast at 4.3 per cent in both 2026 and 2027. However, subdued consumption, weak investment, declining property activity and fragile confidence pose risks.

S&P warned that external or policy shocks could cause a sharper slowdown, particularly if weakening confidence amplifies the economic impact.