India: Growth outlook revised higher – Standard Chartered

Standard Chartered strategists Anubhuti Sahay and Saurav Anand revise their FY27 Gross Domestic Product (GDP) growth forecast to 7.2% from 6.6% following a robust Q1-FY27 print and strong high-frequency indicators. They expect momentum to stay firm into the festival season, with Q2-FY27 GDP at 7.4% and H2-FY27 at 6.7%, despite headwinds from El Niño, higher inflation and fading GST tailwinds.

Growth forecasts lifted despite risks

“We revise our FY27 (year ending March 2027) GDP growth forecast to 7.2% from 6.6%. We have previously highlighted upside risks amid reasonably strong economic activity despite the oil supply and price shock.”

“The revision reflects stronger-than-expected Q1-FY27 (quarter ended June 2026) GDP growth of 7.8%, versus consensus – including us – of 7.3%; continued momentum in July, as indicated by our composite economic indicator; and the likelihood that activity and sentiment remain supportive into the festival season.”

“Given the strength of high-frequency indicators so far, we now expect Q2-FY27 GDP growth of 7.4%, versus 6.6% previously. ”

“We still expect growth to slow in H2-FY27, reflecting the adverse impact of El Niño on agricultural output and rural demand, higher inflation, and fading tailwinds from GST cuts delivered from September 2025. However, momentum should be stronger than previously expected.”

“We now forecast H2-FY27 GDP growth of 6.7%, versus 6.5% previously.”