India's economy will grow at 6.6% in the curent fiscal
NATIONAL: The SBI Research Report for May 2026 projects that India's economy will grow at a rate of 6.6% in the Financial Year 2026-27, a decline from the anticipated 7.5% GDP growth of the previous fiscal year, 2025-26. The report highlights India's resilience in facing global uncertainties and regional conflicts, credit growth is anticipated to remain robust through the first half of 2026-27 bolstered by strong domestic consumption which supports upward GDP growth.
While the report is optimistic about near-term food supply, driven by strong rabi crops, it cautions that inflation may experience considerable volatility due to fluctuations in crude oil prices and other commodities, as well as possible El Niño conditions.
The report stresses the necessity for a comprehensive strategy to address the country's Balance of Payments challenges amid ongoing rupee depreciation and rising crude oil prices. It calls for thoughtful calibration of the Indian Diaspora Bond strategy to optimize aspects like corpus, yield, tenor, and investor-friendly tax treatment.
In addition, the report notes that Artificial Intelligence (AI) contributed between 0.1 to 0.5% to GDP levels annually in advanced economies during 2024-25. It emphasizes that India must refocus its efforts on harnessing AI for productivity improvements, enhanced competitiveness, and integration into global value chains through well-crafted policy frameworks.