In its base case, the report expects India’s real GDP growth to moderate to 7.1 per cent in FY27, which is still healthy and slightly above potential.
The growth will be supported by robust private consumption and a mild pick-up in private investment.
Private investment sentiment is improving with a recovery in private capex underway, driven by emerging sectors, according to the report.
It also expects export growth to maintain momentum, supported by lower US tariffs relative to FY26, steady global growth and robust services exports even as frontloading benefits fade.
The retail inflation is likely to rise to 4.3 per cent on average in FY27 from an estimated 2.5 per cent in FY26. As food prices are expected to remain benign, assuming a normal monsoon in 2026, inflation should normalise from its current lows.
“The reduced weight of food in the new CPI 2024 series should contain the upside to headline from normalising food inflation,” the report added.Headline retail inflation is likely to remain close to the central value of the RBI’s tolerance band. This would allow the central bank to hold the repo rate and focus on transmitting the 125 bps rate cut implemented in calendar year 2025, Crisil said.
The report expects that policy rates will remain steady in FY27; the cumulative rate cut of 125 bps undertaken in calendar year 2025 will continue to be transmitted to bank lending and deposit rates.
“We also expect the RBI to remain proactive on liquidity management. We expect financial conditions to remain resilient in fiscal 2027 amid a supportive monetary policy and strong macro fundamentals.”