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BofA Raises India's GDP Forecast to 7.6% on Strong Reforms, Consumption

Bank of America has significantly upgraded India's GDP growth projection to 7.6% for the current fiscal year, citing robust policy reforms and strong consumption. The global brokerage also raised its forecast for fiscal year 2027 to 6.8%, indicating sustained confidence in the economy's momentum. This revision follows higher-than-expected 8.2% growth in Q2 and broad-based improvements in economic activity towards the end of 2025. The Reserve Bank of India's supportive monetary policy, including multiple rate cuts, has been instrumental in sustaining this growth alongside expansionary fiscal measures.

Key Points: India GDP Growth Forecast Raised to 7.6% by Bank of America

  • GDP forecast raised to 7.6% for current fiscal
  • FY27 estimate upgraded to 6.8%
  • Broad-based economic improvement cited
  • Supportive monetary policy a key theme
  • High-frequency indicators show acceleration
2 min read

Bank of America raises India's GDP growth to 7.6 pc for current fiscal, 6.8 pc for FY27

Bank of America upgrades India's GDP growth forecast to 7.6% for FY25 and 6.8% for FY27, citing robust policy reforms and strong consumption data.

"India's incoming data warrants a GDP forecast upgrade - Bank of America note"

New Delhi, Jan 5

As the Indian economy continues to grow over robust policy reforms and strong consumption, Bank of America has raised the country's GDP growth projection to 7.6 per cent for current fiscal, from its earlier estimate of 7 per cent.

BofA has also upgraded its India GDP estimate for fiscal year 2027 to 6.8 per cent, compared to the previous estimate of 6.5 per cent for FY27.

The global brokerage firm said in its latest note that India's incoming data "warrants a GDP forecast upgrade", as it indicated broad-based improvements in the nation's economic activity towards the end of 2025.

India's growth outlook has already improved after the economy recorded a higher-than-expected 8.2 per cent growth in in the second quarter. This has led to an increase in the growth projections for 2025-26. The Reserve Bank of India (RBI) has raised its GDP growth forecast for the economy to 7.3 per cent.

According to the BofA note, policy support is expected to be a big theme going forward, playing a major role in growth improvement.

The economy has benefited constantly from a supportive monetary environment, with the Reserve Bank of India, under its Governor Sanjay Malhotra, issuing multiple rate cuts in 2025. This has helped the country sustain momentum alongside a broadly expansionary fiscal stance, the brokerage said in its note.

The BofA note further stated that consumption and spending have picked up, alongside firmer investment data.

High-frequency indicators such as fuel consumption, auto sales and credit growth have shown acceleration in November and December as well, thus reinforcing the decision to lift near-term forecast.

The government is set to release the new GDP series along with a new inflation series. The revised national accounts framework will also include back-series data for 2022-23, 2023-24 and 2024-25, enabling continuity and comparison.

However, the government does not expect a significant change in India's GDP growth estimates after the release of the revised national accounts series in February next year.

- IANS

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Reader Comments

R
Rohit P
Numbers look good on paper, but is the common man feeling this 7.6% growth? Petrol prices are still high, and vegetable inflation hits the kitchen budget every month. The growth needs to be more inclusive.
A
Aditya G
Strong consumption data is key. When people are buying cars and fuel, it shows confidence in the economy. The RBI's rate cuts have definitely helped. Let's see if the momentum continues post-budget.
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Sarah B
As someone working in the fintech sector here, I can see the positive sentiment. Credit growth and digital transactions are booming. India's economic story is becoming hard for global investors to ignore.
K
Karthik V
The upgrade to 6.8% for FY27 shows they believe this isn't a short-term spike. Policy continuity will be crucial. Hope the focus remains on manufacturing (PLI schemes) and export growth to build a sustainable model.
M
Meera T
While the headline number is impressive, I respectfully hope the new GDP series brings more transparency. Sometimes these revisions can be confusing for the public. Clarity in data is as important as the growth itself.

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