S&P Global raises India FY27 GDP forecast to 7%; sees 25 bps RBI rate hike

S&P Global Ratings has raised its forecast for India’s economic growth in FY27 to 7% from 6.6%, citing stronger-than-expected economic activity, robust consumption and industrial momentum. The ratings agency, however, expects growth to moderate in the second half of the financial year as the impact of GST rationalisation and income-tax cuts on demand begins to fade.

S&P Global Ratings has raised its forecast for India’s economic growth in FY27 to 7% from 6.6%, citing stronger-than-expected economic activity, robust consumption and industrial momentum. The ratings agency, however, expects growth to moderate in the second half of the financial year as the impact of GST rationalisation and income-tax cuts on demand begins to fade.

S&P Global Ratings has raised its forecast for India’s economic growth in FY27 to 7% from 6.6%, citing stronger-than-expected economic activity, robust consumption and industrial momentum. The ratings agency, however, expects growth to moderate in the second half of the financial year as the impact of GST rationalisation and income-tax cuts on demand begins to fade.

The upward revision follows India’s stronger-than-expected 7.8% GDP growth in the June quarter. According to S&P Global Ratings, industrial activity, domestic consumption, goods exports and faster government investment have emerged as key drivers of the expansion. The agency expects these factors to support growth despite emerging risks from inflation, weather conditions and geopolitical tensions.

Inflation, monsoon risks could influence growth outlook

S&P has projected average consumer inflation at 5.1% in FY27, while flagging weather conditions and agricultural output as important variables for the economic outlook. Cumulative rainfall was 15% below normal as of September 9, raising concerns over agricultural production and the potential impact on food prices.

Higher food inflation could complicate the monetary policy outlook, particularly as economic growth remains firm. S&P said the balance of considerations could shift towards higher interest rates, with persistent inflationary pressures, solid economic activity, the unresolved West Asia conflict and weather-related risks among the factors warranting attention.

The agency expects the Reserve Bank of India to raise its policy rate by 25 basis points during FY27. Such a move would mark a shift in the monetary policy environment as the central bank weighs sustained economic growth against inflationary pressures.

India growth outlook remains above RBI, Fitch estimates

S&P’s 7% growth forecast is higher than the RBI’s 6.7% projection and Fitch Ratings’ 6.4% estimate for FY27. Moody’s also recently raised its forecast for India’s growth during the fiscal year to 7%.

S&P noted that the economy expanded 7.8% in FY26, underscoring the strength of domestic activity entering the current financial year. However, the agency expects the pace to moderate as temporary demand-supporting measures lose some of their impact.

The outlook therefore hinges on whether consumption and investment can maintain momentum while inflation, agricultural output and external geopolitical risks remain manageable. India’s growth trajectory will also be closely watched against the backdrop of a potentially tighter interest-rate environment in FY27. (With inputs from PTI)

. According to S&P Global Ratings, industrial activity, domestic consumption, goods exports and faster government investment have emerged as key drivers of the expansion. The agency expects these factors to support growth despite emerging risks from inflation, weather conditions and geopolitical tensions.

Inflation, monsoon risks could influence growth outlook

S&P has projected average consumer inflation at 5.1% in FY27, while flagging weather conditions and agricultural output as important variables for the economic outlook. Cumulative rainfall was 15% below normal as of September 9, raising concerns over agricultural production and the potential impact on food prices.

Higher food inflation could complicate the monetary policy outlook, particularly as economic growth remains firm. S&P said the balance of considerations could shift towards higher interest rates, with persistent inflationary pressures, solid economic activity, the unresolved West Asia conflict and weather-related risks among the factors warranting attention.

The agency expects the Reserve Bank of India to raise its policy rate by 25 basis points during FY27. Such a move would mark a shift in the monetary policy environment as the central bank weighs sustained economic growth against inflationary pressures.

India growth outlook remains above RBI, Fitch estimates

S&P’s 7% growth forecast is higher than the RBI’s 6.7% projection and Fitch Ratings’ 6.4% estimate for FY27. Moody’s also recently raised its forecast for India’s growth during the fiscal year to 7%.

S&P noted that the economy expanded 7.8% in FY26, underscoring the strength of domestic activity entering the current financial year. However, the agency expects the pace to moderate as temporary demand-supporting measures lose some of their impact.

The outlook therefore hinges on whether consumption and investment can maintain momentum while inflation, agricultural output and external geopolitical risks remain manageable. India’s growth trajectory will also be closely watched against the backdrop of a potentially tighter interest-rate environment in FY27. (With inputs from PTI)

. According to S&P Global Ratings, industrial activity, domestic consumption, goods exports and faster government investment have emerged as key drivers of the expansion. The agency expects these factors to support growth despite emerging risks from inflation, weather conditions and geopolitical tensions.

Inflation, monsoon risks could influence growth outlook

S&P has projected average consumer inflation at 5.1% in FY27, while flagging weather conditions and agricultural output as important variables for the economic outlook. Cumulative rainfall was 15% below normal as of September 9, raising concerns over agricultural production and the potential impact on food prices.

Higher food inflation could complicate the monetary policy outlook, particularly as economic growth remains firm. S&P said the balance of considerations could shift towards higher interest rates, with persistent inflationary pressures, solid economic activity, the unresolved West Asia conflict and weather-related risks among the factors warranting attention.

The agency expects the Reserve Bank of India to raise its policy rate by 25 basis points during FY27. Such a move would mark a shift in the monetary policy environment as the central bank weighs sustained economic growth against inflationary pressures.

India growth outlook remains above RBI, Fitch estimates

S&P’s 7% growth forecast is higher than the RBI’s 6.7% projection and Fitch Ratings’ 6.4% estimate for FY27. Moody’s also recently raised its forecast for India’s growth during the fiscal year to 7%.

S&P noted that the economy expanded 7.8% in FY26, underscoring the strength of domestic activity entering the current financial year. However, the agency expects the pace to moderate as temporary demand-supporting measures lose some of their impact.

The outlook therefore hinges on whether consumption and investment can maintain momentum while inflation, agricultural output and external geopolitical risks remain manageable. India’s growth trajectory will also be closely watched against the backdrop of a potentially tighter interest-rate environment in FY27. (With inputs from PTI)