Global ratings agency Fitch Ratings on Friday marginally raised its GDP growth forecast for India to 7.5% for FY25-26, citing strong domestic demand as the key driver of economic expansion. 

In its latest Global Economic Outlook (March 2026), the agency revised its estimate upward from the 7.4% growth projection made in December. 

For the next financial year (FY26-27), Fitch also raised its growth forecast to 6.7%, compared with 6.4% projected in December 2025. 

The ratings agency said domestic demand remains the primary engine of growth this year, supported by robust consumer spending and investment activity. 

“We estimate that for the 2025-26 financial year, growth will be 7.5%, a marginal upward revision from December. Domestic demand is the biggest growth driver this year, with consumer spending and investment rising by an estimated 8.6% and 6.9%, respectively,” Fitch said. 

What’s the global growth outlook 

Fitch projected global GDP growth at 2.6% in 2026, assuming that the ongoing conflict involving Iran does not lead to a sustained surge in energy prices that pushes oil prices above $70 per barrel on average. 

However, the agency warned that a sharp rise in oil prices could pose significant risks to the global economy. 

“A scenario where oil prices rise to $100 per barrel and remain at that level would represent a significant adverse global supply shock,” said Brian Coulton. 

Can India sustain its growth momentum? 

On India, Fitch noted early signs that economic activity may have moderated slightly at the start of the year. 

“There are tentative signs that real activity slowed in January and February, but the economy remains resilient, and credit growth continues to remain in double digits,” the report said. 

India’s GDP growth slowed to 7.8% year-on-year in the December quarter, compared with 8.4% in the September quarter, reflecting some moderation in momentum. 

Fitch expects growth to slow in the first half of FY26-27, as rising inflation could squeeze household incomes and curb consumer spending. 

Despite this moderation, the agency expects India to remain among the fastest-growing major economies, supported by strong domestic demand and investment activity.