Last Updated on December 4, 2025 3:24 pm by BIZNAMA NEWS
Staff Reporter / New Delhi
Fitch Ratings has raised India’s FY26 GDP growth forecast to 7.4%, up from 6.9%, crediting resilient domestic consumption and the ongoing benefits of tax reforms. The agency said private consumption remains the key growth driver, supported by improving real incomes, stronger consumer sentiment, and gains from GST-related efficiencies.
Growth is expected to ease to 6.4% in FY27, as public investment tapers off. However, Fitch anticipates a pickup in private investment later in the year, helping sustain domestic demand.
India’s economy expanded 8.2% in the July–September quarter of FY26, underscoring solid momentum despite high effective US tariff rates—around 35%—on Indian exports. A potential bilateral trade pact, Fitch noted, could boost external demand.
Inflation is projected to average 1.5% this fiscal, with consumer inflation dropping to 0.3% in October. This sharp cooling, Fitch said, could allow the RBI to deliver one more rate cut on December 5, trimming the repo rate to 5.25%, after which rates are expected to remain steady for two years.
The rupee is forecast to strengthen to ₹87 per US dollar next year. Globally, Fitch has slightly raised its 2025 growth outlook but cautions that a broader slowdown, particularly in the US and eurozone, still looms.