New Delhi, 2 January. India’s nominal GDP growth rate is expected to rise to nearly 11 percent in the financial year 2026-27, while the real growth is projected to be around 7.2 percent. This increase is likely driven by rising consumption through credit within the country and supportive government policies, according to a report released on Friday by SBI Mutual Fund.
The SBI Mutual Fund report states that India’s economic condition may remain strong in the coming period. The key reasons behind this are government reforms and growing consumer preference for better and more expensive products. However, the report also highlights that global recession and geopolitical tensions continue to pose significant risks.
According to the report, in the first half of the current financial year 2025-26, the country’s real GDP growth averaged 8 percent, while nominal GDP growth was slightly lower at 8.8 percent.
SBI Mutual Fund further mentioned that the inflation rate may decline to around 4 percent by financial year 2027. If there is no major downturn in the global economy, the Reserve Bank of India (RBI) may not change its monetary policy for a long period.
The report also refers to recent policy measures such as the government’s Rs 2 lakh crore open market operations (OMO) and the $10 billion buy-sell swap planned for mid-January.
According to the report, rural expenditure could improve slightly due to government schemes and lower inflation aiding farmers. However, the impact of lower income from the Kharif crop still persists. The trade agreement between India and the United States is expected to have minimal impact on growth, as India faces stiff competition in exports from China.
The government’s fiscal deficit is projected to be 4.4 percent in financial year 2026 and may reduce to 4.2 percent in 2027. Nonetheless, deficits at the state level remain high. Supply of government bonds could increase to Rs 29 lakh crore, maintaining pressure on demand and supply.
The report notes that the Indian rupee depreciated by approximately 5 percent in 2025, attributed to demand related to foreign transactions and rising bond interest rates.
Generally, low inflation in India, stable crude oil prices, fiscal discipline, and a current account deficit (CAD) of less than one percent of GDP help strengthen the economy and the rupee.
The report suggests focusing on consumption, the financial sector, and certain industrial sectors as potentially profitable areas for investment.
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My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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