IMF flags oil price surge and weak monsoon as top risks to India's FY27 growth

The International Monetary Fund cut its forecast for India's fiscal year 2026/27 GDP growth to 6.4%, down 10 basis points, while raising the 2027/28 outlook to 6.7%. It said the two main downside risks are a widening Middle‑East war that has pushed global crude oil prices above $90 a barrel and a weak monsoon caused by the El Niño weather pattern. India, which imports roughly 80% of its oil, is vulnerable to energy‑price shocks that could dampen growth and fuel inflation. IMF senior resident representative Ranil Salgado noted, “The downside risks are probably twofold… One is that the war is already starting to expand again, and that has implications for oil prices.”

The Fund also announced it will reassess the quality of India’s national accounts at the next Article IV consultation after the statistics department releases a revised 2022/23 GDP base‑year series later in 2026. India’s national‑account statistics previously received a low ‘C’ rating, prompting steps such as updating the base year and improving deflation methods.