New Delhi, Aug. 3 -- The Centre is likely to retain a fiscal buffer in FY27 as buoyant tax collections and broad-based credit growth support the economy, although rising crude oil and fertiliser prices could put pressure on subsidy expenditure and may require the government to rationalise spending later in the year, ICICI Bank Global Markets said in its monthly economic update for July.

The bank said sustained strength in revenue receipts remains a key positive amid prevailing global uncertainties and provides support for the government to meet its FY27 fiscal deficit target.

ICICI said the Centre's gross tax revenue grew 14 per cent year-on-year in Q1FY27, supported by healthy direct and indirect tax collections. Direct tax collections...