Fitch Raises India's FY'27 GDP Growth Projections To 6.9%

Fitch Ratings on Wednesday raised India's GDP growth forecast for the current fiscal year to 6.9%, from 6.4%, citing strong economic growth in the June quarter and overall economic resilience.

According to Fitch, India's economic momentum is likely to moderate over the remaining fiscal year, prompting the Reserve Bank of India (RBI) to increase interest rates by 0.25% in its October monetary policy meeting.

A growth rate of 7.8% in the June quarter indicates that the "Indian economy has shown resilience in the face of the shock from the US-Iran war, despite the strong terms-of-trade deterioration seen in the first half of 2026," Fitch said.

It said that PMI survey data point to a slower pace of expansion in both manufacturing and services; below-normal monsoon rains will weigh on growth in agriculture and rural demand; and rising inflation will constrain real incomes and consumer dynamics.

"Private investment prospects look more buoyant, and we expect investment to rise by more than 10%; non-food credit growth reached 19% yoy in July," Fitch added.

Overall GDP growth will be 6.9% (revised up from 6.4% in June), Fitch added.

"Given the combination of strong demand, price rises, and adverse supply developments, we expect the RBI to raise rates by 25 bp in October this year to 5.5%. We then expect a further rise to 5.75% in early 2027 and then for rates to ease back to 5.5% in 2028," Fitch said.

Earlier on Wednesday, S&P Global Ratings projected India's FY'27 GDP growth at 7% -- the same rate Moody's Ratings projected last week.

The Indian economy grew at 7.8% in the previous fiscal year (2025-26).