New Delhi: Fitch Ratings on Wednesday raised India’s GDP growth forecast for FY27 to 6.9 percent from 6.4 percent, citing stronger-than-expected economic growth in the June quarter and the economy’s resilience to global shocks.
India’s economy expanded 7.8 percent in the June quarter, which Fitch said demonstrated resilience despite the impact of the US-Iran war and a sharp deterioration in the country’s terms of trade during the first half of 2026.
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Fitch, however, expects economic momentum to slow during the remainder of the fiscal year.
The ratings agency said Purchasing Managers’ Index (PMI) surveys indicate some moderation in manufacturing and services activity. Below-normal monsoon rainfall could also weigh on agricultural growth and rural demand, while higher inflation may squeeze real incomes and consumer spending.
Private investment remains a relatively brighter spot. Fitch expects investment to grow by more than 10 percent, supported by robust credit demand. Non-food credit growth stood at 19 percent year-on-year in July.
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Taking these factors into account, Fitch raised its overall FY27 GDP growth forecast to 6.9 percent from the 6.4 percent projected in June.
Fitch also expects the Reserve Bank of India to tighten monetary policy as strong demand, rising prices and adverse supply-side developments add to inflationary pressures.
It expects the RBI to raise the policy rate by 25 basis points to 5.5 percent at its October monetary policy meeting, followed by another increase to 5.75 percent in early 2027. Fitch expects rates to subsequently ease to 5.5 percent in 2028.
The upward revision comes as other global ratings agencies have also projected robust growth for India. S&P Global Ratings on Wednesday forecast FY27 GDP growth at 7 percent, matching the projection made by Moody’s Ratings last week.
India’s economy grew 7.8 percent in FY26.
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