Archive · 24 Sep 2026
Four Global Agencies Raise India’s FY27 Growth Forecasts
Four major international groups now think India’s economy will grow faster than they previously expected.
Their forecasts for FY27 range from 6.9% to 7.1%.
They were encouraged by strong economic growth in the April-June quarter.
Spending by households, business investment, manufacturing, services and government infrastructure work are supporting growth.
Higher energy prices and the conflict in West Asia could still make things harder.
Less rain than usual could also hurt farming and rural spending.
Growth may slow later in FY27 as tax-cut benefits become weaker and prices reduce people’s purchasing power.
Inflation reached 4.8% in August, which is higher than the Reserve Bank of India’s medium-term target.
The agencies disagree about whether the RBI will cut or raise interest rates.
S&P Global Ratings, Fitch Ratings, the OECD and ADB raised their FY27 India growth forecasts to 6.9%-7.1%.
The agencies cited strong June-quarter growth, resilient consumption, investment, manufacturing, services and capital inflows.
India’s economy grew 7.8% in April-June and recorded 7.8% growth in FY26, exceeding earlier expectations.
The agencies expect growth to moderate later in FY27 because of weaker monsoon rains, higher energy costs, inflation and fading tax-cut benefits.
Inflation reached a 20-month high of 4.8% in August, while forecasts for RBI interest rates differ between a possible cut and projected hikes.
- Who
- S&P Global Ratings, Fitch Ratings, the Organisation for Economic Co-operation and Development, and the Asian Development Bank revised their India forecasts; Moody’s Ratings had also raised its forecast the previous week.
- What
- The four agencies upgraded their forecasts for India’s FY27 GDP growth while warning of higher inflation and slower growth later in the year.
- When
- The revisions were announced on Wednesday and cover FY27; August CPI inflation was reported at 4.8%.
- Where
- India, amid economic effects from the West Asia conflict and elevated energy prices.
- Why
- The agencies cited strong recent growth, resilient domestic demand, investment, manufacturing, services and capital inflows, while accounting for energy, weather and inflation risks.
Rate-Cut Outlook
Rate-Hike Outlook
RBI interest-rate direction
Rate-Cut Outlook
S&P expects a 25-basis-point repo-rate cut during FY27, and some economists expect a cut as early as October.
Rate-Hike Outlook
Fitch expects a 25-basis-point increase to 5.5% in October, another increase to 5.75% in early 2027, and easing to 5.5% in 2028.
Growth after FY27
Rate-Cut Outlook
S&P and ADB expect India’s growth to remain above 7% beyond FY27.
Rate-Hike Outlook
Fitch and the OECD expect growth to slow to 6.5% in FY28 as tax-cut benefits fade, purchasing power weakens and energy and weather risks weigh on demand.
- S&P FY27 forecast
- 7%, up from 6.6%
- ADB FY27 forecast
- 7%, up from 6.6%
- Fitch FY27 forecast
- 6.9%, up from 6.4%
- OECD FY27 forecast
- 7.1%, up from 6.3%
- Recent GDP growth
- 7.8% in April-June and 7.8% in FY26
- August CPI inflation
- 4.8%, a 20-month high and above the RBI’s 4% medium-term target
- Current repo rate
- 5.25% after the RBI’s MPC left it unchanged in August
- RBI FY27 growth forecast
- 6.7%
