New Delhi, June 6 : Amid the global headwinds, the government has made efforts to ringfence the MSME sector with various EPCLGS schemes, and would slash non-essential expenditures on the revenue side to make fiscal ends meet, rather than reducing capital expenditures, according to economists.

On the external front, exports are likely to slow down as global growth takes a hit, says YES BANK â??Ecologueâ??.

The manufacturing sector, particularly MSMEs, could face a slowdown due to supply-chain disruptions, especially in industries dependent on imported inputs such as oil and its derivatives.

â??Overall, we retain our real GDP projection for FY27 at 6.6 per cent (also RBIâ??s forecast) but retain a downside bias if West Asia crisis elongates,â?? it adds.

Indiaâ??s FY26 real GDP clocked 7.7 per cent growth (7.1 per cent YoY in FY25) with GVA registering growth of 7.9 per cent YoY (7.3 per cent YoY in FY25).

Nominal GDP registered a growth of 8.9 per cent in FY26, lower than 9.7 per cent in FY25 as softer inflation kept deflator subdued.

On the production side, growth was anchored by the services and manufacturing sectors while private consumption supported the expenditure side alongside revival in gross fixed capital formation, said the report.

For Q4 GVA came in at 7.9 per cent YoY with GDP registering a growth of 7.8 per cent YoY as services posted a robust 9.9 per cent expansion.

Industry growth eased to 7.4 per cent YoY as manufacturing moderated to 7.3 per cent due to higher input costs stemming from the West Asia crisis, while agriculture rebounded to 3.6 per cent YoY.

On the expenditure side, private consumption softened to 7.1 per cent YoY in Q4 (QoQ at 4 per cent) but remained solid annually at 7.7 per cent, investment momentum strengthened with GFCF registering 10.8 per cent YoY in Q4.

â??For the first two months of FY27, high frequency indicators show some softening. Our early estimates indicate GDP growth erosion of 100-110 bps in FY27 as US-Iran conflict resolution remains uncertain, the report mentioned.

/IANS