Fitch Raises India’s FY27 GDP Growth Forecast to 6.9% on Economic Resilience

India’s GDP growth in fiscal 2027 is expected to touch 6.9 per cent, higher than the previously expected rate of 6.4 per cent, a report said on Wednesday, citing stronger‑than‑expected economic activity and resilience to energy‑price shock triggered by West Asia tensions. The report from ratings agency Fitch Ratings said that India's growth had remained substantially stronger than projected in its 'June Global Economic Outlook', prompting a 50 basis‑point upgrade to its full‑year forecast.

India’s economy grew 7.8 per cent year‑on‑year in the April‑June quarter, and growth in the preceding quarter accelerated to 8.6 per cent, lifting FY26 growth to 7.8 per cent versus Fitch’s earlier 7.4 per cent estimate. The higher forecast comes even as the ratings agency expects the pace of expansion to moderate during the rest of the current financial year.

PMI surveys have indicated slower expansion in manufacturing and services, along with a below-normal monsoon rainfall likely to affect agricultural output and rural demand. Rising inflation could also put pressure on real household incomes and consumer spending, the report noted. Private investment is a key support, while fixed investment is expected to rise 10.6 per cent in FY27 versus 8 per cent in FY26, and noting non‑food credit growth accelerated to 19 per cent year‑on‑year in July. Consumer spending growth, however, is expected to ease to 5.7 percent in FY27 from 7.2 percent in the previous year.

The ratings agency forecasts GDP growth to ease to 6.5 per cent in FY28, slightly lower than its previous forecast, as consumer spending and investment continue to drive activity, while it expects growth to touch 6.5 per cent in FY29. As inflation could inch up higher to 5.5 per cent by December 2026, it expects the central bank to raise the policy rate by 25 basis points to 5.5 per cent during its October meeting, followed by another 25 bps hike in early 2027.

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