Fitch Ratings has raised its forecast for India’s GDP growth in the current fiscal year to 6.9 per cent, up from its earlier projection of 6.4 per cent. In its June Global Economic Outlook, the agency attributed the upward revision to strong first-quarter growth and the resilience of the Indian economy. However, Fitch expects economic momentum to moderate during the second half of the fiscal year. It also anticipates that the Reserve Bank of India may raise interest rates by 25 basis points at its October monetary policy meeting, citing strong domestic demand, rising prices and adverse supply-side developments.

 

Consumer spending growth is expected to slow to 5.7 per cent in FY27, compared with 7.2 per cent in the previous financial year. Fitch projects India’s GDP growth to ease further to 6.5 per cent in FY28, while inflation could rise to 5.5 per cent by December 2026.

 

Meanwhile, S&P Global Ratings has also raised its GDP growth forecast for India in the current fiscal year to 7 per cent, from its earlier estimate of 6.6 per cent. In its Economic Activity for Asia Pacific report, S&P cited robust industrial activity, healthy consumer demand, strong goods exports and accelerating government investment as key drivers of growth. It expects consumer inflation to average 5.1 per cent in FY27.

 

However, S&P warned that growth could weaken in the second half of this fiscal as the benefits of Goods and Services Tax rationalisation and income-tax cuts gradually fade. The agency also highlighted weather-related risks, noting that cumulative rainfall was 15 per cent below normal at the time of its assessment. Agricultural output and food inflation therefore remain key variables to monitor.