The ratings agency noted that India’s economy proved to be more resilient than expected, with growth holding up even as trade deteriorated sharply in the first half of FY27 due to rising energy prices.
The strong performance showed in activities through the first half of the financial year, which led to revising the full-year growth forecast upwards, Fitch said.
Growth to moderate rest of FY27
Despite strong performance so far, the growth, however, is expected to moderate in the remaining quarters of FY27.
Slower expansion in manufacturing and services purchasing managers’ indices, below-normal monsoon rainfall and rising inflation are among factors that could weigh on consumption and rural demand, as per Fitch.
Investment is likely to provide continued support. Private investment is forecast to rise by more than 10%, while non-food credit growth reached 19% year-on-year in July.
GDP forecast for FY28 and FY29
For the next two financial years, the ratings agency has projected India’s GDP growth at 6.5% in both FY28 and FY29. Consumer spending and investment are expected to remain key drivers of activity as the impact of the energy-price shock gradually eases.
The upgrade comes not long after India logged a stronger-than-expected run of GDP data.
The Indian economy grew 7.8% year-on-year in the April-June quarter of FY27, according to data released by the National Statistics Office. It beat the RBI’s 7% projection for the quarter and market expectations of around 7.1%.
