Fitch raises FY26 growth forecast to 6.9% on robust demand, investments
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New Delhi: India is showing resilience amid geo-political uncertainties and is projected to stay above 6 per cent growth over the next three years -- amid a raised outlook of 6.9 per cent growth in current fiscal -- according to the latest Fitch Ratings’ ‘Global Economic Outlook’ released on Wednesday.
On the back of the Q2 2025 outturn (7.8 per cent growth), Fitch has revised up its forecast for the fiscal year ending March 2026 (FY26) to 6.9 per cent from 6.5 per cent in the June report.
Domestic demand will be the key driver of growth, as strong real income dynamics support consumer spending and looser financial conditions should feed through to investment, said the report.
According to the Fitch note, annual growth in India is likely to hit 6.3 per cent in FY27 and with the economy operating slightly above its potential, “we expect growth will edge down to 6.2 per cent in FY28”.
“We still expect the Reserve Bank of India (RBI) to cut rates by 25bp towards the end of the year, as it assesses the impact of the policy loosening already implemented, and that rates will stay there until end-2026. We expect the RBI to start raising rates in 2027,” said the report.
The global rating agency raised its 2025 world growth forecast slightly to 2.4 per cent, helped by stronger data from China and the eurozone, but warned that the US economy is showing clearer signs of slowing.
