Poonam Gupta says resilient domestic demand and improving global conditions could lift India’s growth to about 8%, despite risks from oil prices, weather and inflation.
Poonam Gupta, the Reserve Bank of India’s deputy governor, said India could achieve growth of about 8% if the global backdrop improves and external shocks ease over the coming year, underscoring her view that the economy’s underlying momentum remains firm despite a difficult international environment. Speaking at a media event in Mumbai on Tuesday, Gupta pointed to the drag from higher oil prices, uneven rainfall and El Nino conditions, arguing that the economy might already have reached an inflection point if those pressures had not hit in recent years.
Her comments come as India continues to post robust macroeconomic numbers. Gross domestic product expanded 7.1% in the first quarter of the fiscal year, and the Reserve Bank has raised its projection for the October-to-December quarter to 7.2% from 6.4% previously. The central bank’s full-year forecast for fiscal 2027 stands at 7.1%, while the International Monetary Fund has projected 7% growth in both 2026 and 2027, putting India among the fastest-growing large economies in the world.
Gupta said the strength has carried into the second quarter, with support coming from tax collections, bank credit, merchandise exports, purchasing managers’ indices and infrastructure activity. India’s second-quarter GDP data are due on November 30. The IMF has also said in recent updates that India’s growth outlook is being driven by resilient domestic demand and strong services activity, even as the economy faces higher energy costs and broader geopolitical uncertainty.
On prices, Gupta cautioned that inflation may edge higher as external supply shocks move through the economy. The IMF expects Indian inflation to rise to 5% in 2026 from 2% last year, while the RBI’s own forecast is slightly higher in the near term before easing next year. She also said the wider global economy has proved more resilient than many had expected, with the IMF nudging up its world growth forecast to 3.1% for 2026, in part because of artificial intelligence-related investment in advanced economies.
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