ICRA Downgrades India's FY27 GDP Forecast To 6.2% From 6.5%

India's GDP is likely to grow at 6.2% in financial year 2027, down from the earlier estimate of 6.5% amid elevated crude oil prices triggered by the West Asia crisis, according to rating agency ICRA (Investment Information And Credit Rating Agency).

For Fiscal 2026, ICRA estimates GDP (Gross Domestic Product) growth at 7.5%, marginally lower than the National Statistical Office's (NSO) Second Advance Estimate (SAE) of 7.6% for the fiscal.

ALSO READ: India Missed Out On AI And Now Its Run As Market Darling May Be Over

“ICRA now assumes crude oil prices to average at $95/bbl in fiscal 2027, against our prior estimate of $85/bbl, given the ongoing stickiness in prices amid the stalemate in West Asia. Consequently, we have pared our baseline forecast for the FY27 GDP growth (at constant 2022-23 prices) to 6.2% from the 6.5% expected earlier,” ICRA Chief Economist Aditi Nayar said.

The rating agency also said GDP growth in the fourth quarter is expected to ease to a three-quarter low of 7% from 7.8% in third quarter of 2025-26.

A slower expansion across the industrial and services sectors is expected to have moderated GDP growth between these quarters, even as the performance of the agriculture sector is likely to have improved slightly.

ALSO READ: Current Account Deficit To Widen To 2.3% Of GDP In FY27: Report

“However, a slower rise in manufacturing volumes, contraction in exports, and nascent signs of margin pressure amid the West Asia fallout may have weighed on the industrial gross value added (GVA) growth performance in the quarter. Consequently, we expect the GDP growth to have slowed to a three-quarter low of 7% in Q4 2025-26, below the NSO's implicit estimate of 7.3% for the quarter, while remaining quite robust," Nayar said.

Slowing global growth and shipping disruptions triggered by the West Asia conflict weighed on India's merchandise exports in the March quarter of 2025-26, which fell by 2.8% on a YoY basis, after a modest 1.4% rise in the December quarter. 

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.