New Delhi, Apr 30 (KNN) India’s economy remains resilient at the start of FY2026-27, but faces emerging risks from the ongoing West Asia conflict, which has disrupted supplies of energy, fertilisers and key industrial inputs, according to the latest Monthly Economic Review released by the Department of Economic Affairs under the Finance Ministry.
The report noted that India enters the new fiscal year at the intersection of domestic resilience and external turbulence, following a strong GDP growth of 7.6 percent in the previous financial year, reported Financial Express.
Growth indicators remain strong
High-frequency indicators pointed to continued economic momentum, with e-way bill generation touching an all-time high of 140.6 million in March 2026. Goods movement remained robust, recording a 13.7 percent year-on-year growth as of April 22, compared to 12.9 percent in March.
Purchasing Managers’ Index (PMI) data also indicated expansion in economic activity, though with signs of moderation in pace.
Global outlook and risks
India continues to remain a bright spot globally, with the International Monetary Fund revising its growth forecast for India to 6.5 percent for FY2026-27.
However, the report cautioned that risks are tilted towards higher inflation, wider fiscal and external deficits and potential slowdown in growth. These risks are primarily linked to supply disruptions in energy and fertilisers due to geopolitical tensions.
Rising cost pressures
The review highlighted increasing cost pressures, with India’s crude oil basket averaging around USD 113 per barrel in March and nearing USD 115 per barrel till April 24.
Retail inflation rose marginally to 3.4 percent in March from 3.2 percent in February, while food inflation increased to 3.87 percent. Wholesale inflation also accelerated sharply to 3.88 percent from 2.13 percent in the previous month.
The report flagged rising inflation in passenger transport, particularly in air travel, where fares recorded double-digit inflation of 14.2 percent. This was attributed to higher air turbine fuel (ATF) prices following recent revisions by oil marketing companies.
Outlook
While domestic demand and economic activity remain steady, the government emphasised the need for close monitoring of global developments, particularly energy markets, to mitigate potential spillover effects on inflation and growth.
The report underscores that sustaining resilience will depend on managing external shocks while maintaining macroeconomic stability.
(KNN Bureau)
