India’s nominal GDP growth to improve to 11 pc in FY27: Report

New Delhi: India’s nominal GDP growth is expected to improve to about 11 per cent in FY27 with real growth at 7.2 per cent, driven by domestic credit led consumption and policy support, a report said on Friday.

The report from SBI Mutual Fund said that it is “constructive on growth” in the medium term with structural reforms and premiumisation driving the outlook, though global slowdown and geopolitics remain key risks. Real GDP growth in FY26 averaged 8 per cent year on year in the first half while nominal growth was subdued at 8.8 per cent.

The fund house expected inflation to mean revert to about 4 per cent in FY27, with the Reserve Bank of India (RBI) likely to keep policy on a long pause unless global growth deteriorates.

The mutual fund highlighted recent liquidity measures including a Rs 2 trillion Open Market Operations (OMO) round and a $10 billion buy sell swap in mid-January. “Rural spending outlook is modestly positive as welfare measures and low inflation mitigate the kharif income setback. A positive development of India-US trade deal could only be mildly positive for growth outlook as the country still faces stiff competition from rising dominance in Chinese exports,” the report noted.

Fiscal deficit is projected to ease to 4.2 per cent in FY27 from a likely 4.4 per cent in FY26, though state deficits remain elevated.