The Economic Survey projects India’s real GDP growth for the financial year 2026-2027 in the range of 6.8 to 7.2 per cent based on an outlook for the economy that is one of steady growth amid global uncertainty.

The survey states that for India, “these global conditions translate into external uncertainties rather than immediate macroeconomic stress. Against the backdrop of global uncertainties, the domestic economy remains on a stable footing. Inflation has moderated to historically low levels, although some firming is expected to occur going forward.”

Balance sheets across households, firms and banks are healthier, and public investment continues to support activity. Consumption demand remains resilient, and private investment intentions are improving. These conditions provide resilience against external shocks and support the continuation of growth momentum. The forthcoming rebasing of the CPI series in the coming year will also have implications for inflation assessment and warrant careful interpretation of price dynamics, the economic survey observes.

Slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment. At the same time, ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front. While these risks remain manageable, they reinforce the importance of maintaining adequate buffers and policy credibility, the survey also points out.

Importantly, the cumulative impact of India’s policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7 per cent. With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even.

The outlook for the global economy remains dim over the medium-term, with downside risks dominating.

At the global level, growth is expected to remain modest, leading to broadly stable commodity price trends.

Inflation across economies has trended downward, and monetary policies are therefore expected to become more accommodative and supportive of growth. However, certain key risks persist. If the AI boom fails to deliver the anticipated productivity gains, it could trigger a correction in overly optimistic asset valuations, with the potential for broader financial contagion.

Additionally, a protraction of trade conflicts would weigh on investment and further weaken the global growth outlook. These forces collectively suggest that downside risks to global growth remain prominent, although a fragile stability holds for now, the survey added.