India’s economy is likely to lose some momentum in the second half of fiscal 2026-27 as tighter financial conditions, elevated energy prices and unfavourable base effects weigh on activity, while broadening inflation pressures could keep monetary policy focused on price stability, DBS Bank economist Radhika Rao said.
India started FY27 (April 2026 to March 2027 fiscal year) on a strong footing, with the economy growing 7.8 per cent year-on-year in the first quarter, supported by resilient domestic demand, consumption, public capital expenditure and manufacturing, Rao, Senior Economist and Executive Director at DBS Bank, said in an assessment of the macroeconomic outlook.
DBS expects full-year FY27 growth to average 7.3 per cent, compared with a revised 7.8 per cent for FY26, she said.
High-frequency indicators including goods and services tax collections, e-way bills, electricity demand and digital payments have remained resilient, suggesting domestic activity continues to hold up,
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