3 hrs ago
S&P Raises India GDP Growth Forecast to 7 Percent
S&P Global Ratings thinks India’s economy will grow by 7 percent this fiscal year.
It previously expected growth of 6.6 percent.
The economy grew 7.8 percent in the June quarter, which was stronger than expected.
S&P said factories, consumer spending, exports, and government investment helped the economy.
It warned that growth may slow later as some tax-related benefits fade.
S&P also expects prices to rise by an average of 5.1 percent.
It thinks the Reserve Bank of India may increase interest rates by 25 basis points.
Less-than-normal rainfall could affect farming and food prices.
S&P Global Ratings raised India’s GDP growth forecast for the current fiscal year to 7 percent from 6.6 percent.
The upgrade followed stronger-than-expected 7.8 percent growth in the June quarter.
S&P cited industrial activity, consumption, goods exports, and government investment as key growth drivers.
S&P expects consumer inflation to average 5.1 percent and the Reserve Bank of India to raise rates by 25 basis points in FY27.
The forecast matches Moody’s projection but exceeds estimates from the Reserve Bank of India and Fitch Ratings.
- Who
- S&P Global Ratings, with projections also issued by Moody’s, the Reserve Bank of India, and Fitch Ratings.
- What
- S&P raised India’s GDP growth forecast for the current fiscal year to 7 percent and forecast a possible 25-basis-point interest-rate increase.
- Where
- India.
- When
- The forecast was issued on Wednesday for the fiscal year ending March 31, 2027; the June quarter recorded 7.8 percent growth.
- Why
- S&P cited robust industrial activity, healthy consumption, strong goods exports, and accelerating government investment, while also citing inflationary, geopolitical, and weather-related risks.
Key facts
- S&P growth forecast
- 7 percent for the current fiscal year, raised from 6.6 percent
- June-quarter growth
- 7.8 percent, higher than expected
- Inflation forecast
- Consumer inflation is expected to average 5.1 percent in FY27
- Interest-rate outlook
- S&P expects the Reserve Bank of India to raise its policy rate by 25 basis points
- Rainfall
- Cumulative rainfall was 15 percent below normal through September 9, 2026
- Other forecasts
- Moody’s also projected 7 percent growth; the Reserve Bank of India projected 6.7 percent and Fitch Ratings 6.4 percent
- Key risks
- Slower growth later in the fiscal year, food inflation, agricultural output, persistent inflation, the West Asia conflict, and weather conditions
Quotes
S&P Global Ratings
Global credit-rating agency and economic forecaster
“We expect the balance of considerations to shift toward higher interest rates. Factors supporting this shift include solid growth, persistent inflationary pressures, an unresolved conflict in West Asia, and weather-related risks.”
NDTV
“We have consequently upgraded our GDP growth forecast for the current fiscal year, ending March 31, 2027, to 7 per cent, from 6.6 per cent previously”
NDTV
Sources
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