The Economic Survey 2026-2027 on Thursday projected a period of steady growth despite global uncertainties and suggested caution rather than pessimism.
The survey, which delineates the economic outlook going forward and warns the government of potential risks, today projected a real GDP growth in the range of 6.8 to 7.2 per cent in the 2027 financial year.
“The cumulative impact of policy reforms over recent years appears to have lifted the economy. Medium-term growth potential closer to seven per cent. With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even. Taking these considerations together, the economic survey projects real GDP growth in the financial year 2027 in the range of 6.8 to 7.2%. The outlook therefore is one of steady growth amid global uncertainty requiring caution, but not pessimism,” stated the survey tabled in Parliament by Finance Minister Nirmala Sitharaman today.
The survey stated FY26 was an unusually challenging year for the economy on the external front and flagged heightened uncertainty, global trade and the imposition of high penal tariffs creating stress for manufacturers, particularly exporters and affecting business confidence.
“The government responded by using the crisis as an opportunity to push through key measures such as GST rationalisation, faster progress on deregulation, and further simplification of compliance requirements across sectors. FY27 is expected to be a year of adjustment as firms and households adapt to changes with domestic demand and investment gaining strength,” it said.
The survey, however, cautioned against the external environment remaining uncertain.
Importantly, the survey said the outlook for the global economy remains dim over the medium term with downside risk dominating.
“At the global level, growth is expected to remain modest, leading to broadly stable commodity price trends. Inflation across economies has trended downwards and monetary policies are expected to become more accommodative and supportive of growth. However, certain key risks persist. If the artificial intelligence boom fails to deliver the anticipated productivity gains, it could trigger a correction in overly optimistic asset valuation with the potential for broad financial contagion,” the survey warned.
These forces, it said, collectively suggest that downside risks to global growth remain prominent, although fragile stability holds for now.
In the context of India, the survey said global conditions translate into external uncertainties rather than immediate macroeconomic stress.
“Slow 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,” said the survey.
It said while risks remain manageable, they reinforce the importance of maintaining adequate buffers and policy credibility.
“Against this backdrop, the domestic economy remains on a stable footing. Inflation has moderated to historically low levels, although some firming is expected going forward. Balance sheets across households, firms and banks are healthier and public investment continues to support activity. Consumption demand, resilient and private investment intentions are improving. These conditions provide resilience against external shocks and support continuation of growth momentum,” it said.
The survey also said external factors would remain stable for India and exports would remain resilient.
“Against the backdrop of global trade uncertainty, Indian exports, merchandise and services reached a record USD 825.3 billion in financial year 2025 with continued momentum in financial year 2026. Despite high tariffs imposed by the United States, merchandise exports grew by 2.4 per cent from April to December 2025 and services exports increased by 6.5 per cent. Merchandise imports for April to December 2025 increased by 5.9 per cent. Following the trends in previous years, the rise in merchandise trade deficit has been counterbalanced by an increase in services,” states the survey projecting a strong internal and external environment.
It pegged growth in remittances as a vital pillar of a stable external environment.
In most years, remittances have surpassed gross FDI inflows underscoring their importance as a key source of external funding. As a result, the current account deficit remains moderate at 0.8 per cent of the GDP in H1FY 26.
