In its Global Economic Outlook (GEO)-September, Fitch said the pace of economic activity accelerated sharply between the March and June quarters of the current fiscal year.
Global rating agency Fitch Ratings has raised India’s GDP growth forecast to 6.9 per cent for the current fiscal year, citing strong June quarter growth and domestic consumption-led demand. Earlier, it had projected it to be 6.5 per cent. Fitch is the first global rating agency to have upped India’s GDP growth estimates for current fiscal year after the string of downward revisions by various agencies earlier this year due to trade and tariff uncertainties.
In its Global Economic Outlook (GEO)-September, Fitch said the pace of economic activity accelerated sharply between the March and June quarters of current fiscal year. The real GDP growth in April-June rose to 7.8 per cent year-on-year, from 7.4 per cent in January-March.
Fitch Rrevises Its Forecast
In its June GEO report, Fitch had forecast a 6.7 per cent growth for the April-June quarter.
“On the back of the 2Q25 (April-June) outturn, Fitch has revised up its forecast for the fiscal year ending March 2026 (FY26) to 6.9 per cent from 6.5 per cent in the June GEO,” it said.
Fitch said the trade tensions with the US have increased in recent months, with the US imposing an additional 25 per cent tariff on imports from India. Effective August 27, Indian goods in the US attract a 50 per cent duty.
“We expect this will eventually be negotiated lower, but the uncertainty around trade relations will dampen business sentiment and potentially investment.
GST To Be Effective From September 22
The government has adopted reforms to the Goods and Services Tax to be effective from September 22, which should modestly boost consumer spending over the remainder of this and the next fiscal years,” Fitch said.
However, Fitch expects growth to slow in the second half (October-March) of the financial year. For the next fiscal year (2026-27), Fitch projected growth at 6.3 per cent, which would edge down to 6.2 per cent in FY28.
Fitch’s FY26 GDP growth estimate for India is highest among other comparable agencies. Finance Ministry’s Economic Survey had projected India’s growth to be between 6.3-6.8 per cent in current fiscal year.
With PTI inputs
Leave a Reply