As the Indian economy continues to grow over robust policy reforms and strong consumption, Bank of America (BofA) has raised the country’s GDP growth projection to 7.6 per cent for current fiscal (FY26), 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.
