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India’s FY27 Second Half Faces Global Risks, Says CEA
India’s economy grew strongly in the first three months of fiscal 2026-27.
The chief economic adviser said this growth figure was supported by several other economic measurements.
Some critics had questioned whether the reported number matched everyday economic conditions.
The adviser said growth in July and August also appeared fairly strong.
However, he warned that the rest of the year may be harder.
Oil has become more expensive for India, and interest rates are rising in India and other countries.
Higher costs could slow businesses and households.
He said recent reforms and tax changes have helped support growth.
Several international organizations still expect India to grow faster than the central bank currently predicts.
Chief Economic Advisor V Anantha Nageswaran warned that India’s fiscal 2026-27 second half could be difficult as global growth risks and interest rates rise.
He defended the reported 7.8% first-quarter GDP growth, citing GST collections, credit growth and exports as supporting indicators.
Nageswaran estimated July-August growth at about 7.3%, while acknowledging that the double-deflation method may have added 30-40 basis points.
India’s fuel cost reportedly rose to $117 per barrel in September from $80-$85 during June-August, increasing economic pressure.
Several international agencies raised India’s growth forecasts, with projections ranging from 6.9% to 7.1%, above the Reserve Bank of India’s 6.7% estimate.
- Who
- Chief Economic Adviser V Anantha Nageswaran, the Reserve Bank of India, and international economic agencies are central to the discussion.
- What
- Nageswaran warned of a challenging second half of fiscal 2026-27 while defending India’s reported 7.8% first-quarter GDP growth.
- Where
- The comments concerned India and were made in New Delhi.
- When
- The remarks were made on September 30, 2026, with discussion of data from July-August and September.
- Why
- Global growth risks, rising interest rates and higher oil prices could put pressure on India’s economic momentum.
Chief Economic Adviser’s Assessment
Critics’ Concerns
Reliability of GDP data
Chief Economic Adviser’s Assessment
V Anantha Nageswaran said the 7.8% first-quarter GDP figure was based on credible and reliable data, with GST collections, credit growth and exports showing continued momentum.
Critics’ Concerns
Critics questioned whether the 7.8% GDP figure reflected economic realities.
Economic outlook
Chief Economic Adviser’s Assessment
Nageswaran said domestic momentum, including momentum linked to GST rate cuts, remained present and that reforms had strengthened India’s resilience.
Critics’ Concerns
The second half faces significant risks from higher oil prices, rising interest rates and weaker global growth prospects.
Effect of measurement methods
Chief Economic Adviser’s Assessment
Nageswaran said the double-deflation method may have contributed only 30-40 basis points to the reported growth rate.
Critics’ Concerns
The acknowledgment of a possible methodological contribution suggests that the headline figure may not entirely represent underlying economic activity.
Key facts
- First-quarter GDP growth
- 7.8% in fiscal 2026-27, above the Reserve Bank of India’s 7% forecast
- July-August growth estimate
- About 7.3%, according to Nageswaran
- Indian fuel cost
- $117 per barrel in September, compared with $80-$85 during June-August
- Current inflation
- 4.3%, within the Reserve Bank of India’s stated 2%-6% range
- Reserve Bank of India FY27 forecast
- 6.7% GDP growth
- International forecasts
- S&P Global Ratings and the Asian Development Bank forecast 7%; Fitch Ratings forecast 6.9%; the Organisation for Economic Co-operation and Development forecast 7.1%
- Revised Moody’s forecast
- 7%, up from 6% previously
Quotes
V Anantha Nageswaran
India’s Chief Economic Advisor
“whether that requires an interest rate response or not, it is for RBI to decide. They will definitely look at second-round effects if it is only food and energy related or all-pervasive.”
thehindubusinessline.com
“But, based on July-August data, we are looking at something like 7.3 per cent GDP growth. So it is not something that 7.8 per cent (GDP growth in June quarter) came out of thin air”
thehindubusinessline.com
Sources
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