Finance ministry has estimated India’s real GDP growth at 7.35% in the July-September quarter of FY27, which is 15 basis points higher than the Reserve Bank of India's (RBI) Q2 projection of 7.2%. However, the Ministry also cautioned about ‘considerable’ uncertainties arising due to elevated crude oil prices, rising food inflation and an uncertain outlook for the kharif crop.
“Building on growth of 7.8% in Q1, the Department’s nowcasting model estimates real GDP growth at 7.35 per cent in Q2 FY27,” the ministry said in its October monthly economic review (MER). Nowcasting is the prediction of the very recent past, the present, and the very near future state of an economic indicator.
The nowcasting model, which was first adopted in the Economic Survey for FY26, estimates FY27 GDP growth at 7.3%, higher than the upper band of 7.2%, which was previously suggested in the Economic Survey earlier this year.
As highlighted by the Ministry of Finance, domestic demand, sustained investment activity and structural reforms are expected to support growth through the remainder of the financial year. With the recent GST process reforms likely to ease compliance requirements and working capital constraints for businesses.
Additionally, healthy credit growth and trade agreements are expected to provide additional support to consumption, investment and exports. While the Ministry is confident of sustained domestic growth, it flagged the risks posed by global price shocks, noting that their impact on growth figures varies depending on the importance of affected commodities in a country’s production, export and import baskets.
“Overall, robust domestic demand, sustained investment activity, a resilient financial sector, and proactive supply-side management have underpinned India’s growth resilience so far. Uncertainties remain considerable,” stated the Ministry.
According to the MER, if there is a sharp rise in the prices of major export commodities, nominal GDP can get affected without a corresponding increase in real output. Two major shocks influencing global prices in 2026 are the conflict in West Asia, which has pushed up energy prices and spilled over into metals and some food commodities.
