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Informist, Wednesday, Sept. 23, 2026

 

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--Fitch: India FY27 GDP growth forecast raised to 6.9% from 6.4% earlier
--Fitch: India economy showed resilience amid West Asia war
--Fitch: Expect growth to moderate over remaining of FY27
--Fitch: See inflation rising to 5.5% in December
--Fitch: See RBI raising repo rate by 25 bps to 5.50% Oct
--Fitch: See RBI raising repo rate by another 25 bps to 5.75?rly 2027

 

NEW DELHI – Fitch Ratings Wednesday raised its forecast for India's GDP growth in 2026-27 (Apr-Mar) by 50 basis points to 6.9% after the country reported a better-than-expected growth in the June quarter despite global headwinds. The growth is expected to moderate to 6.5% in the next two financial years, according to Fitch.

 

"Indian economy has shown resilience in the face of the shock from the US-Iran war, despite the strong terms-of-trade deterioration seen" in the first half of FY27, Fitch said in a press release. Earlier in June, the rating agency had estimated India's growth at 6.4%. Fitch's FY27 projection is 20 bps higher than the Reserve Bank of India's forecast for FY27 at 6.7%.

 

Recently, S&P and Moody's projected India's FY27 growth at 7.0%. India's GDP grew at 7.8% in Apr-Jun and in FY26, as per the new GDP series. 

 

However, Fitch expects the growth to moderate over the remainder of the financial year, according to its Global Economic Outlook for September. Slowdown in business activities and weak monsoon are expected to weigh on the growth in agriculture and rural demand, the report said. Meanwhile, the rating agency expects investments to rise more than 10% as private investment prospects look "more buoyant".

 

Fitch sees India's GDP growth at 6.5% in FY28 and FY29 with growth supported by "consumer spending and investment". "External demand will hold up, with net exports contributing positively to growth," the report said.

 

Headline inflation is estimated to average 4.2% in FY27 and 4.0% in the next financial year, according to Fitch. "Food price inflation has risen steadily, but core inflation has also increased from 3.0% to 4.2%." The rating agency's forecast shows CPI inflation to increase in the "short term". CPI inflation seen rising to 5.5% in December, Fitch said, adding, "Inflation will then ease back towards the Reserve Bank of India's (4%) target."

 

Given the combination of strong demand, price rises, and adverse supply developments, the rating agency said it expects the RBI's monetary policy committee to raise repo rates by 25 bps each in October and early 2027. "We then expect a further rise to 5.75% in early 2027 and then for rates to ease back to 5.5% in 2028."

 

The rating agency also sees the Indian rupee exchange rate against the dollar to remain close to current levels for the rest of the year, and to depreciate slightly next year. At 1203 IST, the rupee was seen at 95.72 against a dollar.  End

 

US$1 = INR 95.72

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shweta

Edited by Akul Nishant Akhoury

 

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