GDP growth projected at healthy 7.1% for FY2027; prolonged energy shock, sub-par monsoon acting as headwinds
Quarterly Update
15 Sep 2026
Following the strong GDP growth in Q1 FY2027 (+7.8%), the domestic economy faces risks pertaining to repercussions of the weak monsoon on agricultural output and food prices. While Indian corporates were able to withstand energy price shock in Q1 FY2027, the recent reversal in Indian basket crude oil prices to above $100/bbl could exert pressure on profitability and dampen the outlook for domestic investment and consumption, if the West Asia war sustains.
Moreover, with the upcoming base effect related to last year’s GST rationalisation, ICRA foresees a step down in the growth prints during Q2-Q4 relative to the level seen in Q1.
