News

S&P Global Revises India's GDP Growth Forecast to 6.7% for FY26 and 6.8% for FY27.

Economy Business | Dated: 30 Nov 2024

On 25th November 2024, S&P Global Ratings (previously known as Standard & Poor's) released its latest "Economic Outlook Asia-Pacific Q1 2025: US Trade Shift Blurs the Horizon". It has lowered India's Gross Domestic Product (GDP) growth projection for Financial Year 2025-26 (FY26) to 6.7% from its previous estimate of 6.9% and for FY27 to 6.8% from 7%.

🎯 Key Highlights:

- However, it has retained its growth forecast for the current financial year (FY25) at 6.8%. This projection is based on the prevailing high interest rates and reduced fiscal support, dampening urban demand. It has also projected that the Indian economy will grow at 7% in FY28.
- The Global Ratings Agency has increased its inflation projection for India to 4.6% for FY25, from its previous estimate of 4.5%.
- The report has projected overall GDP growth for Asia-Pacific region (including China) in 2024 at 4.5%, from its previous estimate of 4.4%.

💡 Other Important Facts:

(i) The report noted that Purchasing Manager Indices (PMI) remain strong, but other high-frequency indicators suggest temporary slowing of momentum, mainly due to a setback in the construction sector during the September quarter.
(ii) The report underscored that climate change-related disruptions and supply shocks in the agriculture sector are the main contributors to rising food prices in the country, which is further delaying rate cuts by the RBI.

📚 Test Your Knowledge:

Recently, S&P Global revised India's GDP growth forecast to 6.7% for FY26 and what for FY27?

Correct Answer: 6.8%

🚀 Quick Recap:

About S&P Global Ratings

President : Martina L. Cheung
Headquarters : New York