India GDP Growth Forecast by Global Agencies

On September 23, global rating agency Fitch raised India's Gross Domestic Product (GDP) growth forecast for the financial year 2025-26 from 6.5% to 6.9%. Fitch stated that this growth will be supported by domestic demand as real incomes rise, leading to increased consumer spending. Additionally, softer financial conditions will promote investment. Fitch expects some slowdown in growth during the second half of the fiscal year, forecasting 6.3% growth for FY 2027 and further decline to 6.2% in FY 2028.

Fitch also noted a significant global GDP decline expected in 2025, projecting a global growth rate of 2.4%, slightly up from June's forecast but lower than last year's 2.9%. The forecast for China’s GDP growth was raised from 4.2% to 4.7%, Eurozone growth from 0.8% to 1.1%, and the US from 1.5% to 1.6%. Global growth for 2026 is projected at 2.3%.

Fitch believes India's trade disputes with the US will be resolved through negotiations, but investment may still be impacted by uncertainty. New GST rates effective from September 22 are expected to slightly increase consumer spending through the remainder of this year and next fiscal year. The agency also projects inflation will remain moderate due to favorable monsoon rains and high food stocks, with inflation at 3.2% by end 2025 and 4.1% by end 2026. The Reserve Bank of India is expected to cut policy rates by 25 basis points by year-end.