S&P Global pares GDP Growth Forecast To 6.3% For FY26

New Delhi: S&P Global Ratings on Friday cut India’s growth projections by 0.2 percentage points to 6.3 per cent for the current fiscal year citing uncertainty over the US tariff policy and downside risks from its spillover to the economy.

In its report titled ‘Global Macro Update: Seismic Shift In US Trade Policy Will Slow World Growth’, S&P Global Ratings said, “we reiterate that there are no winners in a scenario of escalating protectionist policies.”

S&P said among Asia-Pacific’s major economies, China is expected to see its growth drop by 0.7 percentage points in 2025 to 3.5 per cent and in 2026 to 3 per cent. S&P projected India’s GDP growth to be 6.3 per cent in 2025-26 and 6.5 per cent in 2026-27 fiscal year. In March, S&P had lowered the FY26 GDP growth forecast to 6.5 per cent, from 6.7 per cent.

“The risks to our baseline remain firmly on the downside in the form of a stronger-than-anticipated spillover from the tariff shock to the real economy. The longer-term configuration of the global economy, including the role of the US, is also less certain,” S&P said.

With regard to exchange rate fluctuations, S&P projected INR/USD exchange rate to be 88 by 2025-end from 86.64 in 2024. The INR/USD pair is witnessing significant fluctuations since the US tariff announcement and the rupee is currently hovering at 84-level against the greenback. According to S&P, the US economy is expected to grow 1.5 per cent this year and 1.7 per cent in the next.