economic outlook

India's economic horizon is looking promising, with the Reserve Bank of India forecasting a robust 6.9% GDP growth for the fiscal year 2026-27. Yet, challenges loom as global tensions, particularly in West Asia, and escalating energy costs could disrupt this trajectory. Inflation is predicted to rise slightly to 4.6%, while the RBI targets a steady 4%.

India can reclaim over 7% growth by FY28 through stable economics and supply improvements, contingent on better external factors, according to Chief Economic Adviser V Anantha Nageswaran. Despite the RBI's lowered FY27 forecast to 6.6% due to global price hikes and disruptions, Nageswaran remains optimistic. He anticipates nominal GDP growth will surpass the budget's 10.1% estimate.

The RBI maintained the repo rate at 5.25% amidst economic slowdown fears and rising inflation risks from the West Asia conflict. Governor Sanjay Malhotra signaled concern over generalized inflation, cutting the FY27 growth forecast to 6.6% and raising inflation projections to 5.1%.

India's economy shows 'cautious resilience' despite global headwinds like Middle East conflict and rising oil prices. While manufacturing and services remain strong, and forex reserves offer a buffer, inflation concerns are mounting due to wholesale price surges. A weaker monsoon could further challenge growth and rural demand.

Prime Minister Narendra Modi met with the Economic Advisory Council to discuss strengthening India's economic growth amidst global uncertainty. The Reserve Bank of India kept the repo rate unchanged at 5.25%, citing geopolitical tensions and inflation concerns, while revising GDP growth and inflation projections downwards and upwards respectively for FY2026-27.

India is projected to overtake China in global GDP share by 2060, as China's economic contribution is expected to stabilize and decline. This shift is driven by China's rapidly falling population share, contrasting with India's trajectory. The report also notes significant inequality differences between the two Asian giants.

The International Monetary Fund (IMF) has allocated $695 million to support Sri Lanka's recovery efforts following Cyclone Ditwah and the ongoing crises in West Asia. While the country faces significant challenges, its commitment to economic reforms demonstrates remarkable resilience. Unfortunately, the escalating conflict has intensified economic difficulties, with growth anticipated to decelerate.

Pakistan's foreign exchange reserves are nearing the $18 billion target, yet a widening trade deficit and upcoming debt payments raise economic stability concerns. Analysts warn the reserve build-up masks deeper vulnerabilities, with the rupee facing depreciation pressure. A soaring trade gap and potential decline in remittances could challenge the nation's financial outlook.

Gold price prediction today: While gold and silver prices are seeing some weakness, in the domestic market gold has managed to exhibit some resilience, says Vedika Narvekar, Research Analyst - Commodities & Currencies, Anand Rathi Shares and Stock Brokers.

RBI Governor Sanjay Malhotra cautioned that a potential south-west monsoon deficit could dampen rural demand and private consumption. While government initiatives aim to mitigate this, rising energy prices and supply disruptions also pose growth risks. The central bank consequently lowered its FY27 GDP growth forecast to 6.6%.

The rupee opened lower against the dollar, influenced by a stronger greenback, rising crude oil prices, and geopolitical tensions in the Middle East. This decline followed a strong gain on Friday, as investors remained cautious ahead of key US economic data and potential Federal Reserve interest rate decisions.

Wall Street saw a rebound on Monday, led by technology and AI-linked stocks that bounced back from Friday's sharp sell-off. The S&P 500, Dow Jones, and Nasdaq Composite all gained ground as investors reassessed recent market movements. Meanwhile, oil prices eased from overnight peaks despite ongoing geopolitical tensions.

Perplexity AI CEO Aravind Srinivas predicts the AI race winner will be the company generating the most economic value per watt consumed. He emphasizes "token value per watt per user" as the key metric, surpassing sheer model size.

At constant prices, real GDP for the January-March quarter is estimated to have been at Rs 87.77 lakh crore, compared with Rs 81.40 lakh crore in the corresponding period of the previous fiscal year. Nominal GDP during the quarter is estimated at Rs 94.65 lakh crore, reflecting growth of 9.1%.

Microsoft CEO Satya Nadella has slammed an internal memo that outlined plans to "make people addicted" to Scout, the company's new AI assistant unveiled at Build 2026. In a message to about 50 top engineers, Nadella called the strategy "nonsense" and a "non goal," suggesting the authors "may want to go work elsewhere." The leaked document was authored by Microsoft VP Omar Shahine.

Dalal Street anticipates a busy week driven by the RBI's interest rate decision, key economic data, and global developments like the US-Iran situation and crude oil prices. Investors will closely track manufacturing and services PMI, GDP growth, and foreign exchange reserves for market direction.

What does the GDP data tell us about India’s economic prospects? Will the real hit from the US-Iran conflict reflect in the first quarter GDP numbers? And, is India’s long-term growth story under threat? Let’s take a look:

US stocks continued their record-setting rally, driven by strong earnings and AI optimism, pushing major indices higher. Despite inflation and geopolitical concerns, investor sentiment was buoyed by hopes of a US-Iran ceasefire extension, easing energy market pressures. Technology stocks, particularly Dell, led the gains as markets closed the week on a positive note.

Acknowledging the impact of the West Asia crisis, the RBI has said that several factors will help India counter the negative effects and emerge strong.

Gold price prediction today: Given the geopolitical tensions and a possible change in the US Federal Reserve’s stance, gold prices are likely to see limited upside in the near term, says Vedika Narvekar, Research Analyst - Commodities & Currencies, Anand Rathi Shares and Stock Brokers.

Selling was widespread across the market. Every stock in the Sensex basket traded in negative territory. The weakness was equally visible beyond the benchmark indices. The Nifty Midcap 100 and Nifty Smallcap 100 both lost more than 1%, reflecting a broad risk-off mood among investors.

The Middle East conflict is impacting Asia Pacific's commercial real estate through rising energy costs and inflation. This is affecting logistics, retail, and office sectors, while investment markets face growing uncertainty due to potential interest rate shifts. Broader macroeconomic channels are expected to shape the region's property outlook.