Global Agencies Lift India FY27 Growth Forecast to 7.1%
Fitch, S&P, ADB and OECD raised India's FY27 growth outlook, citing strong exports and domestic demand.
Key points
- Fitch, S&P, ADB and OECD raised India's FY27 growth forecast to between 6.9 and 7.1 percent.
- India's merchandise exports reached $216 billion from April to August, an 18 percent year-on-year rise.
- Agencies expect the RBI to raise the repo rate by 25 basis points due to high inflation.
Four global institutions raised India's FY27 growth forecast on Wednesday. ADB, OECD, Fitch and S&P Global now project 6.9 to 7.1 percent growth. This update reflects strong industrial activity and resilient consumer spending.
The revisions follow a better-than-expected first quarter. India’s economy grew by 7.8 percent in April-June. This performance exceeded expectations despite ongoing geopolitical tensions in West Asia.
Institutions update GDP growth estimates
Fitch raised its forecast to 6.9 percent from 6.4 percent. ADB and S&P Global moved their estimates to 7 percent from 6.6 percent. The OECD increased its projection to 7.1 percent from 6.3 percent.
All five global agencies now exceed the RBI’s 6.7 percent target. Moody’s also raised its projection to 7 percent last week. These changes signal confidence in India's economic resilience.
Trade data drives positive outlook
Merchandise exports reached $216 billion between April and August. This figure represents an 18 percent year-on-year increase. Goods exports have shown double-digit growth for five consecutive months.
Economists note that trade diversification has offset supply chain disruptions. N.R. Bhanumurthy of Madras School of Economics said this strength was expected. It aligns with recent positive economic data releases.
Inflation may force rate hikes
Agencies expect the RBI to raise the repo rate this year. S&P Global predicts a 25-basis-point increase during FY27. Fitch anticipates a similar hike as early as October.
Wholesale inflation has hovered near 10 percent since May. Retail inflation hit a 20-month high of 4.82 percent in August. Business Standard reports these pressures are driving policy expectations.
