Indias GDP Expected to Grow by 7.7% in Q3 FY27, Says Bank of America
Bank of America forecasts Indias GDP growth at 7.7% for Q3 FY27, driven by strong manufacturing and consumer demand.
New Delhi, November 12 (Daily Kiran) : India’s gross domestic product (GDP) is projected to increase by 7.7% year-on-year in the third quarter of fiscal year 2027, covering the period from October to December. This estimate comes from a report released by Bank of America Global Research. During this period, the gross value added (GVA) is expected to rise by 8.1%.
The bank anticipates that the overall growth rate for fiscal year 2027 will be around 7.4%, with the growth potentially increasing to 7.5% in fiscal year 2028. The report highlights that this growth will occur despite global supply challenges, such as disruptions in West Asia, uneven monsoon patterns, and weaknesses in the agricultural sector, reflecting the resilience of the Indian economy.
Strong industrial and manufacturing activities, alongside sustained consumer demand and credit growth, are expected to continue supporting the country’s economic development. The manufacturing sector is projected to see nearly a 12% increase due to robust industrial activities.
The industrial production index (IIP) growth rate is expected to rise from 6.2% in the second quarter to 7.3% in the third quarter. Additionally, auto sales, electricity demand, and freight activities remain strong, while bank credit growth hovers around 20%.
The report notes, “We expect GDP growth in the first half of fiscal year 2027 to average 7.7% year-on-year, slightly lower than the 8.1% annual growth rate observed in the second half of fiscal year 2026. While we maintain our full-year GDP growth estimate at 7.4%, there is potential for a slight increase.”
For the second quarter of fiscal year 2027, nominal GDP growth is estimated to be approximately 13.9% year-on-year, marking the highest nominal growth in nearly four years.
The report indicates that while India’s growth momentum appears robust, it is susceptible to global-level disruptions and risks. Recently, oil prices have seen a slight decline, but geopolitical conditions remain uncertain. If oil prices remain high through 2027, growth risks may escalate again.
Factors such as elevated oil prices, geopolitical uncertainty, potential weaknesses in the rural economy due to El Niño, and possible further interest rate hikes by the Reserve Bank of India could all pose risks to growth.
