India's GDP to grow 7.5% in FY27: Axis

He projected the trend GDP growth at 7% while the real GDP growth to be above it, driven by structural and regulatory reforms, lower borrowing costs, accelerated capital formation, and a cyclical boost from policy easing."The receding fiscal drag and supportive monetary policy will drive above-trend growth of 7.5% while structural reforms and regulatory easing will boost growth in the medium term," Mishra said Tuesday, while elaborating the outlook for 2026.He said that the growth will not lead to significantly higher inflation at least in the next year due to the slack in the economy. He projected FY27 headline inflation of around 4% despite above-trend growth and a likely rebound in food prices."The headline inflation will not rise to a level which necessitated a monetary policy tightening... Given the economic slack, the economy can sustain above-trend growth for a few years before inflationary pressures build up," he said, adding : "Median inflation, a better gauge of underlying price pressures, has been stable at around 3% for 18 months signalling persistent slack in the economy."Mishra expects the RBI to continue with the softer monetary stance even as the policy rates have likely bottomed. "There are other tools to increase money supply and to aid monetary transmission and credit growth," he said, expecting issuance of more treasury bills, shorter-duration bonds which would reduce the yield curve steepness and lead the 10-year yields to fall to 6% in FY27.On the currency depreciation, he felt that the reason behind it is more speculative than fundamental.