New Delhi: Global agencies S&P, Fitch, Asian Development Bank (ADB) and OECD on Wednesday raised India’s FY27 GDP growth projection to around 7 per cent, boosted by robust June quarter economic activity and resilient domestic demand despite conflict in West Asia.
Additionally, S&P and Fitch said inflationary pressures will push the Reserve Bank to hike policy interest rates by at least 25 basis points in the current year.
Paris-based Organisation for Economic Cooperation and Development (OECD) upped GDP growth forecast by 80 basis points to 7.1 per cent — the highest growth rate so far projected by any international agency for FY’27.
ADB, while raising the growth forecast to 7 per cent, from 6.6 per cent estimated in July, said the Indian economy has benefited from lower-than-expected supply disruptions and sustained capital inflows, which helped cushion the impact of the conflict in the Middle East.
S&P upgraded India’s GDP growth forecast for the current fiscal year to 7 per cent, from 6.6 per cent previously, while Fitch Ratings said growth in India remains “very strong” with “very robust” dynamism despite the oil price shock, hiking GDP growth estimates to 6.9 per cent, from 6.4 per cent earlier.
Last week, US-based Moody’s Ratings raised GDP growth forecast for the fiscal year to 7 per cent — the fastest among all G20 economies.
S&P Global Ratings
S&P hiked India’s GDP growth forecast for the current fiscal year to 7 per cent, from 6.6 per cent previously, citing robust economic activity and forecast that the RBI could hike interest rates by 25 basis points in FY27.
The Indian economy grew higher than expected at 7.8 per cent in the June quarter, driven by robust industrial activity, healthy consumption, strong goods exports, and accelerating government investment. But a slower pace of expansion in both manufacturing and services and below-normal monsoon rains is likely to moderate growth over the remaining part of the fiscal year ending March 31, 2027.
Growth is expected to ease in the second half of the fiscal year as the tailwinds from Goods and Services Tax (GST) rationalisation and income tax cuts diminish, it added.
Fitch Ratings
Fitch Ratings raised India’s GDP growth forecast for the fiscal to 6.9 per cent, from 6.4 per cent, citing strong economic growth in the June quarter and overall economic resilience.
The 7.8 per cent growth rate in the June quarter indicates that the 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 2026, Fitch said.
India’s economic momentum is likely to moderate over the remaining fiscal year, prompting the RBI to increase interest rates by 0.25 per cent in its October monetary policy meeting, Fitch said, adding inflation to touch 5.5 per cent in December this year.
OECD
The Paris-based body raised India’s GDP growth projection for current fiscal by 80 basis points to 7.1 per cent citing resilient domestic demand and government policies that cushioned households and firms from the impact of higher energy prices.
“Despite recent strong momentum, reduced purchasing power is also expected to weaken growth in India through the second half of this year, before a gradual recovery takes place in 2027. In annual terms, growth is projected to fall from 7.8 per cent in fiscal year (FY) 2025-26 to 7.1 per cent in FY 2026-27 and 6.5 per cent in FY 2027-28,” OECD said.
ADB
The Manila-based ADB raised its forecast for India’s FY’27 growth to 7 per cent, up from 6.6 per cent projected in July, citing stronger-than-expected economic performance in the June quarter despite supply-side disruptions caused by the West Asia crisis.
Growth is supported by robust investment demand, resilient consumption, and solid growth in manufacturing and service sectors.
The economy has also benefited from lower-than-expected supply disruptions, sustained capital inflows, and limited pass-through of higher input costs to consumer prices, which helped cushion the impact of the conflict in the Middle East, the Asian Development Outlook report said.
