India's Finance Ministry released its latest Monthly Economic Review on Thursday, projecting real GDP growth of 7.3% for the September quarter of FY27, a 0.5 percentage point dip from the 7.8% recorded in the April–June period.
The nowcasting model, introduced earlier this year, underpins the forecast, while e‑way bill generation and the manufacturing Purchasing Managers’ Index both signaled a deceleration, hinting that the momentum is easing.
Services activity, buoyed by stronger new business and employment, rose in August, and electricity and fuel consumption continued to grow at healthy rates. Bank credit expanded robustly, and production of capital and infrastructure goods reflected a resilient investment cycle.
Automobile sales climbed across rural and urban markets, signalling broad‑based consumption, the ministry noted. Favorable monsoon conditions have kept kharif sowing near last year’s levels, bolstering agricultural output and rural demand.
Geopolitical tensions in West Asia have disrupted energy markets and trade routes, keeping energy prices volatile. Japan Credit Rating Agency recently upgraded India’s sovereign rating from BBB+ to A‑. In tandem, OECD, S&P Global, ADB, Fitch, and Moody’s have all raised their FY27 growth forecasts, lifting the outlook to 7.1% on average.
The Reserve Bank of India currently projects FY27 growth at 6.7%, and the ministry will present the full review to Parliament next week, where lawmakers will debate the implications for fiscal policy.