ICRA Forecasts India’s FY26 GDP Growth at 6.2% Amid Slowing Momentum.
Economy Business
In mid-June 2025, credit agency ICRA (Investment Information and Credit Rating Agency) projected India’s real Gross Domestic Product (GDP) growth to moderate to 6.2% in FY26, marking a slowdown from the estimated 6.5% in FY25, with inflation expected to rise moderately.
- ICRA’s latest outlook estimates real GDP growth at 6.2% for FY26, easing from 6.5% in FY25, while real Gross Value Added (GVA) growth is projected at 6.0%, a dip from 6.4% last year.
- The agency attributes the slowdown partly to weak merchandise exports and lingering global trade uncertainties. However, positive contributors include sustained rural demand, rabi harvest proceeds, fiscal support via tax relief, and below‑inflation EMI payments.
- ICRA expects Consumer Price Index (CPI) inflation to exceed 3.5%, with Wholesale Price Index (WPI) inflation above 1.8% in FY26. The fiscal deficit is forecast at 4.4% of GDP, with a moderate current account deficit (CAD) in the range of 1.2%–1.3%.
Main Point :- (i) The Centre’s capital expenditure is projected to rise by around 10%, supporting investment activity. Nonetheless, private sector capex remains subdued amid export weakness and policy uncertainty.
(ii) FY25 ended with 6.5% GDP growth, driven by construction, services, and rural consumption. But softening global trade and industrial demand have tempered prospects for FY26.
(iii) While ICRA forecasts 6.2%, other sources offer slightly varied projections: Nomura also expects 6.2%, and the Economic Survey estimates a 6.3–6.8% range for FY26. Earlier in March, ICRA had been more optimistic at 6.5%, though later revised its stance downward.
About ICRA Limited
CEO: Ramnath Krishnan
Headquarters: India
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