The course of India's growing inflation will be determined by whether or not crude oil prices remain below $100 per barrel, Chief Economic Advisor Anantha Nageswaran underlined on Friday.
The statement comes after the Reserve Bank of India's monetary policy committee hiked its FY27 CPI projection to 5.1% against 4.6% earlier. Brent crude prices, which had taken a breather in the last two days, have edged upwards again even though they remain well below the crucial $100 per barrel mark.
"Whether oil prices continue to stay below $100 will also determine course of inflation," Nageswaran stated during a Ministry of Statistics and Programme Implementation press briefing, adding that evolving oil prices will need to be watched.
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Notably, he projected that the trade deficit is likely to widen in fiscal year 2027 as well, following suit from FY26.
The CEA backed RBI's decision to slash GDP growth estimates to 6.6% for FY27, even as he highlighted that Nominal GDP growth for FY27 could be significantly higher than the budget estimate of 10.1%.
Nageswaran underscored that while global uncertainty continues to weigh on capital flow dynamics, India's growth outlook remains resilient.
He said that if economic growth were to slip below the 7% mark due to external factors, government policies and reforms would help steer the economy back to a 7% growth trajectory in FY28 or once conditions normalize.
Moreover, he went on to flag emerging supply-side price pressures, particularly in wholesale inflation, indicating that rising input costs could begin to influence broader price trends in the economy.
CEA's comment on economic growth come in the backdrop of India clocking a 7.8% GDP growth rate in quarter-ended March 2026.
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India's GDP Growth In Last Quarter Of FY26
India's gross domestic product (GDP) grew by 7.8% in the January-March quarter, under the new series, as per the statistics released by the government on Friday. This is slightly lower as compared to the 8% growth posted in the preceding quarter.
The fourth quarter growth is higher than the estimate of 7.3%, as projected by the analysts tracked by Bloomberg.
For the full financial year (FY26), the economy expanded at a robust 7.7% year-on-year, comfortably outperforming the Street's estimate of 7.5%. This strong full-year print underscores the resilience of domestic macroeconomic fundamentals, which have sustained momentum despite escalating geopolitical headwinds and crude oil volatility triggered by the West Asia conflict.
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