Fitch raises India's FY26 GDP growth forecast to 6.9 pc

Fitch Ratings on Wednesday (September 10) raised India’s GDP growth forecast for the current financial year to 6.9 per cent from 6.5 per cent earlier, citing robust growth in the June quarter and strong domestic demand.

Also Read: PM Modi hails 7.8 per cent GDP growth, takes swipe at Trump’s tariffs

Fitch GDP forecast

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

This was considerably higher than the 6.7 per cent projection in the June GEO report.

According to the global ratings agency, India is demonstrating resilience despite geo-political uncertainties and is expected to maintain growth above 6 per cent over the next three years.

Also Read: Indian economy grows 7.8 pc in April-June quarter, boosted by farm sector

Domestic demand drives growth

"On the back of the 2Q25 (April–June) outcome, Fitch has revised 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 is set to remain the primary driver of growth, supported by strong real income dynamics that bolster consumer spending, while easier financial conditions are anticipated to spur 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".

The Reserve Bank of India (RBI) is expected to cut rates by 25 basis points towards the end of this year, as it evaluates the impact of the policy loosening already in place. Rates are likely to remain unchanged until end-2026, before the RBI begins raising them in 2027, the report noted.

(With inputs from agencies)