Fitch Ratings Lowers India’s Medium-Term Growth Outlook to 6.4% Over Next Five Years.

Economy Business

Global credit rating agency Fitch Ratings has increased India’s potential GDP growth forecast for the next five years (2025–2029) from 6.2% to 6.4%.


      - The upward revision is driven by rising employment rates and a slight increase in the working-age population, which enhance India’s economic growth potential.

      - India’s projected GDP growth rates are expected to be 6.4% in 2025, 6.3% in 2026, and 6.4% in 2027, reinforcing its position as a leading growth performer globally.

      - Fitch expects TFP growth in India to gradually slow down and stabilize at its long-term average of 1.5%, suggesting more moderate gains in efficiency going forward.

Main Point :-   (i) Total Factor Productivity (TFP)—also known as Multi-Factor Productivity (MFP)—measures how efficiently economic inputs like labor and capital are converted into output (GDP). It is a key indicator of economic efficiency.

      (ii) Despite India’s upgrade, Fitch has revised its five-year growth forecast for emerging markets as a group down from 4.0% to 3.9%, indicating broader global challenges.

(iii) This revision highlights India’s improving fundamentals and its capacity to sustain strong, long-term economic growth among emerging market peers.

          ____________________________