Fitch Raises India's FY26 GDP Forecast to 6.9%

• Fitch raises India's FY26 GDP forecast to 6.9% from 6.5% due to strong Q2 growth.
• Domestic demand to drive growth via consumer spending and investment.
• Fitch forecasts India's FY27 GDP growth to slow to 6.3%, then 6.2% in FY28.

New Delhi, Sep 10 (PTI) Fitch Ratings on Wednesday upped India’s GDP growth forecast for current fiscal year to 6.9 per cent from 6.5 per cent earlier on the back of strong June quarter growth and domestic

demand drivers.

In its Global Economic Outlook-September, Fitch said the pace of economic activity accelerated sharply between the March and June quarters of current fiscal years, with real GDP growth rising to 7.8 per cent year-on-year, from 7.4 per cent in January-March.

This was substantially higher than the forecast of 6.7 per cent in our June GEO.

“On the back of the 2Q25 (April-June) outturn, Fitch has revised up its forecast for the fiscal year ending March 2026 (FY26) to 6.9 per cent from 6.5 per cent in the June GEO,” it said.

Domestic demand will be the key driver of growth, as strong real income dynamics support consumer spending and looser financial conditions should feed through to investment, Fitch added.

However, Fitch estimated annual growth to slow in the second half of the financial year, “and so we expect growth to slow in the next fiscal FY27 to 6.3 per cent. With the economy operating slightly above its potential, we expect growth will edge down to 6.2 per cent in FY28”. PTI JD TRB