India’s Growth Engine Gains Steam: Reuters Poll Upgrades FY26–27 Outlook

India's economic pace is set to accelerate further, with the latest Reuters poll putting GDP growth at 6.4% in FY2025–26 and 6.7% in FY2026–27. These are a marginal but real upgrade from the May forecast of 6.3% and 6.5%, respectively, as optimism around domestic demand and investment resilience gathers pace further against the backdrop of headwinds emanating from overseas.

Forecast Highlights:

The revised estimates indicate India to continue being one of the world's fastest-growing large economies.

The revised bullishness comes from strong private consumption, government investment in infrastructure, and recovering investor confidence.

Economists polled anticipate inflation staying within Reserve Bank of India comfort levels, favoring accommodative policy conditions.

Growth Drivers in Focus:

Resilient domestic consumption, particularly urban and services, continues to serve as the anchor for growth.

Government expenditure, especially in the areas of transport and energy, will be anticipated to draw private capital.

Relaxation of financial conditions and stable interest rates will most probably facilitate credit growth and business expansion.

Challenges on the Horizon:

Job creation remains a concern, with economists warning that growth must consistently exceed 8% to absorb new workforce entrants.

Growth in exports may slow due to global trade uncertainty, tariff barriers, and geopolitical tensions.

Manufacturing, especially MSMEs, continues to face structural bottlenecks and soft external demand.

Policy Outlook Snapshot:

The RBI will need to tread with caution, balancing its pledge to growth and inflation.

Budget consolidation will decelerate modestly to provide scope for capital spending, but the government will stay within glide path limits.

Land, labor, and logistics reforms have been viewed as necessary for the sustenance of over 7% consistent growth.

Global Context:

India's better prospects contrast with decelerating growth in China, the US, and the Eurozone and place it at the forefront as the world's top source of growth. The World Bank and OECD have also put India's growth at 6.3%–6.7%, which supports the high-growth forecast.

Economists caution that worldwide shocks—financial restraint or oil price volatility—could still pose risks to the downside.

Sources: Times of India, Economic Times, Reuters, IBEF, OECD Report June 2025