2 min readSep 26, 2026 06:44 AM IST First published on: Sep 26, 2026 at 06:44 AM ISTOver the past few days, global agencies have upgraded their full-year growth estimates for India, following the first-quarter GDP estimates that showed a stronger-than-expected economic momentum. The Asian Development Bank, for instance, is now pegging growth at 7 per cent for the year, up from its earlier forecast of 6.6 per cent. S&P Global is now forecasting the economy to grow at 7 per cent, while the OECD has raised its projection from 6.3 per cent to 7.1 per cent. Moody’s had earlier raised its growth forecast for the year to 7 per cent, up from 6 per cent.Some of the commentary has revolved around investments, industrial activity and exports as driving growth, despite concerns over activities being impacted by the conflict in West Asia. Industrial production has been healthy, with IIP growing at 6.3 per cent during April-July and manufacturing by 7 per cent. The Centre’s capital spending is growing at a brisk pace — capex has surged by almost 30 per cent during April-July this year. Merchandise exports have grown at a robust 17.8 per cent during April-August, aided perhaps by a weak currency. Growth, however, is expected to moderate towards the second half of the year. As per S&P Global, “growth to ease in the second half of the fiscal year as the tailwinds from general sales tax rationalisation and income tax cuts diminish”. The OECD also expects the momentum to weaken, “before a gradual recovery takes place in 2027”. The farm sector has emerged as a key area of risk. As per the ADB, “Worse-than-expected El Niño could reduce agricultural output and raise food inflation” in the wider region.AdvertisementPrice pressures are building up in the economy, and the expectations of higher interest rates have gained traction. S&P Global expects inflation to average 5.1 per cent, and the RBI to “raise its policy rate by 25 bps in the current fiscal year”. As per the OECD, “India is projected to raise policy rates temporarily to help offset stronger inflationary pressures.” The central bank’s monetary policy committee is slated to meet in a few weeks. The growth-inflation dynamics should tilt the scales towards tighter policy.