S&P Global Raises India’s Growth Projection to 6.5 Pc In FY26
In India, falling food inflation also helps contain headline inflation. However, across the region, redirection of exports away from the US will weigh on price increases.
Chennai: S&P Global has raised India’s GDP growth for FY26 to 6.5 per cent considering normal monsoon, income tax concessions and monetary easing. However, India will have to look out for price increases.
From its previous forecast, S&P Global has raised the GDP forecast by 0.2 percentage points for FY26 to 6.5 per cent and 6.7 per cent in FY27. S&P’s FY26 GDP forecast is in line with RBI’s forecast for the current fiscal.
Asia-Pacific economies face sizable external pressure, notably from uncertain US tariff policy and soft imports in China. However, domestic demand resilience is particularly relevant in limiting the economic slowdown in economies less exposed to goods exports such as India and the Philippines, S&P Global found.
“In India, growth picked up after a soft patch. Indeed, we see India's GDP growth holding up at 6.5 per cent in FY26. That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” it said.
It also found that inflation has generally receded even as sequential core inflation has risen in India in recent months. As per its forecast, inflation in India can inch up to 4.4 per cent in FY26 against 4 per cent in FY25.
Recent falls in global energy prices and currency appreciation against the US dollar will dampen price increases in the months ahead, even taking into account the recent rise in the oil price amid Middle East turmoil.
In India, falling food inflation also helps contain headline inflation. However, across the region, redirection of exports away from the US will weigh on price increases.
It predicts key interest rates by the RBI to remain stable at 5.25 per cent this year and coming years. The exchange rate of rupee will move up to 88.5 in FY26.
