GDP growth
India’s nominal GDP growth may increase to around 11 percent in the financial year 2026-27. At the same time, real GDP growth is estimated to be around 7.2 percent. Strong domestic consumption, improvement in bank credit and continuous policy support from the government and the Reserve Bank are believed to be the major reasons behind this growth. SBI Mutual Fund believes that the trend of India’s economy will remain positive in the medium term. The report said that the structural reforms being carried out in the country and the increasing demand for premium and value-added products are giving new impetus to economic growth.
According to the report, India’s real GDP growth in the first half of FY26 averaged around 8 percent, while nominal growth was recorded at around 8.8 percent. Although the pace of nominal growth remained relatively slow, domestic demand supported economic activity. The report estimates that inflation may come down to around 4 percent in FY27. In such a situation, it is expected that the Reserve Bank will not make any major changes in interest rates until there is a major decline in the global economy. The RBI has taken several steps in recent months to maintain liquidity in the market, including large-scale purchases of government bonds and measures such as dollar-rupee swaps.
Improvement in expenditure from village to city
The outlook regarding expenditure in rural areas is said to be light but positive. Lower inflation and government welfare schemes can compensate for the losses caused by the weak Kharif crop. Apart from this, a possible trade agreement between India and America can also prove helpful for growth. However, increasing competition from China remains a major challenge. Fiscal deficit is likely to come down to 4.2 percent of GDP in FY27. At the same time, the supply of government bonds may increase to around Rs 29 lakh crore, due to which the balance of demand and supply in the market may remain a little tight.
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