V Anantha Nageswaran, Chief Economic Advisor, Government of India (file photo)
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Chief Economic Advisor V Anantha Nageswaran on Friday said that the growth rate of nominal GDP (Gross Domestic Product) could be higher than the Budget Estimates of FY27. He also expressed hope that the real GDP growth rate to be back to 7 per cent trajectory in FY28, subject to macro stability and supply measures.Meanwhile, experts say even if growth slows down, India will be an impressive contributor to global growth.Giving his perspective on GDP growth numbers, Nageswaran said that with upward momentum of retail inflation, the nominal GDP growth rate is expected to cross the Budget. “The good news is that the nominal GDP growth will be significantly higher than the number which the budget estimates used, which is 10.1 per cent for the current financial year,” he said. RBI has upped the inflation estimates for FY 27 to 5.1 per cent.External headwindsTalking about overall economic growth, Nageswaran asserted that the growth is contingent on improvement in external conditions. The Reserve Bank on Friday lowered its GDP forecast for FY27 to 6.6 per cent from the 6.9 per cent estimated in April, citing elevated energy and other commodity prices, as well as continued supply disruptions arising from the conflict in West Asia, which are likely to weigh on economic activity.“We have no reason to second-guess them (RBI forecast) at this point, because there are both possibilities on the upside and on the downside with respect to the numbers that they have presented,” he said.Further, “So, even if the growth were to slip below 7 per cent as the RBI forecast suggests… macro stability measures and supply assurances will bring us back to a 7 per cent plus growth track in FY28 or as soon as external conditions improve,” he said. He further said it is a hope based on the assumption that the pre-February 28 condition is restored before FY28. “Now, if these conditions continue, then we will revisit the estimate for the next financial year,” he added.Growth ResilienceMeanwhile, experts do see a slowdown in growth; nonetheless, its share in global growth will be better. “India’s growth performance in 2026-27 will depend largely on a speedy normalisation of global crude supply and prices. Even if 2026-27 growth clocks in the range 6.5 to 6.6 per cent, India would be an impressive contributor to global growth, DK Srivastava, Chief Policy Advisor at EY India, said. Adding to this, Rajni Thakur, Chief Economist at L&T Finance, said: “While multiple risks in terms of inflationary pressures, imminent rate hikes, and persistent volatility continue to cast a shadow over FY27 expectations, today's GDP print raises hope of limited disruptions as domestic strength offsets external pressure.”However, some economists apprehended a double whammy. “The West Asia war (higher energy prices and weak currency due to expected higher current account) and weaker rainfall due to El Nino are likely to have an impact on India’s growth-inflation dynamics. Ind-Ra expects growth to slow down to 6.7 per cent and inflation to increase to 5 per cent in FY27,” said D K Pant, Chief Economist with India Ratings & Research.Published on June 5, 2026
