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Fitch Ratings Retains India's FY26 GDP at 6.5%, Raises FY27 Forecast to 6.3%.

Economy Business | Dated: 20 Mar 2025

In March 2025, New York (United States of America, USA)-based credit rating agency, Fitch Ratings released its March edition of the Global Economic Outlook (GEO). The report has kept India's Gross Domestic Product (GDP) projection unchanged at 6.5% for Financial Year 2025-26 (FY26).

🎯 Key Highlights:

- Meanwhile, it has raised India's GDP forecast for FY27 to 6.3% from 6.2% in its December 2024 edition of GEO, amid the United States of America (USA)-instigated global trade war.
- India's GDP growth recovered in Q4 FY25 (January-March) to 6.2%, up from 5.4% in Q3. This was driven by higher private and public spending, including capital investments, and strong agricultural growth. The overall GDP for FY25 is projected at 6.3%. Fitch has also lowered the global growth forecast from 2.9% (2024) to 2.3% (2025).
- Consumer price inflation dropped from 4.3% in January 2025 to 3.6% in February 2025, mainly due to lower food prices. The report projects inflation to decline to 4.0% by December 2025 but rise slightly to 4.3% by December 2026.

💡 Other Important Facts:

(i) Fitch Ratings anticipates two additional policy rate cuts in 2025, reducing the rate from 6.25% to 5.75% by December 2025.
(ii) Strong export growth and lower imports contributed significantly to GDP growth in 2025. However, net exports are expected to have a neutral impact on GDP growth in FY26 and FY27.

📚 Test Your Knowledge:

As per Fitch Ratings' recent Global Economic Outlook (GEO), what is India's projected GDP growth rate for FY26?

Correct Answer: 6.5%

🚀 Quick Recap:

About Fitch Ratings

President : Ian Linnell
Headquarters : New York