Finance Ministry sees 7.3% GDP growth in July-September, far higher than RBI

The Finance Ministry has projected India’s real GDP growth at 7.3% for the July-September quarter of FY27, significantly higher than the Reserve Bank of India’s current forecast of 6.4%.

The projection was included in the Finance Ministry’s Monthly Economic Review for September, released on Thursday. The ministry said that growth momentum had continued into the second quarter of FY27, although at a more measured pace.

The official GDP data for the July-September quarter is scheduled to be released by the statistics ministry on November 30. The Finance Ministry’s projection is based on its nowcasting measure, which uses recent economic indicators to update near-term growth estimates.

The RBI’s 6.4% forecast was made on August 5, before official data showed that India’s GDP had grown 7.8% in the April-June quarter. The first-quarter growth figure was higher than the RBI’s earlier projection of 7%.

Several economists and international institutions have subsequently revised their growth expectations for India. S&P Global Ratings, Fitch Ratings, the OECD and the Asian Development Bank raised their growth forecasts for 2026-27 in September, with their estimates ranging between 6.9% and 7.1%.

The RBI’s Monetary Policy Committee is scheduled to announce its next interest-rate decision on October 7. The central bank is also expected to update its economic growth and inflation projections at that time. Its current projection puts average GDP growth for 2026-27 at 6.7%.

Despite the strong growth outlook, the Finance Ministry cautioned that India cannot rely solely on its post-Covid economic performance. The ministry pointed to geopolitical and geoeconomic uncertainty, higher oil prices, rising global bond yields and unsettled trade relations as challenges for the Indian economy.

The report also highlighted pressure on capital flows. It said India faces challenges in attracting foreign capital amid uncertain global conditions, although net foreign direct investment inflows are expected to perform better in the current financial year than in the previous year.

The ministry said that India needs to continue improving its competitiveness and governance. It argued that a competitive economy would be important for innovation, manufacturing and sustained economic growth.

Foreign investors have also continued to sell Indian stocks and bonds. According to the report, foreign investors sold Indian financial assets worth $9.36 billion during 2026-27 so far, following $16.59 billion of sales in 2025-26.

At the same time, net FDI inflows improved in July, reaching $7.35 billion, an over five-year high. Net FDI inflows during the first four months of 2026-27 stood at $13.43 billion, marking an improvement compared with the combined net inflows of $7.7 billion recorded during 2024-25 and 2025-26.