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Global rating agencies S&P Global Ratings and Fitch Ratings, along with the Asian Development Bank (ADB), have raised their forecasts for India’s economic growth in FY27, citing stronger-than-expected economic activity and resilient domestic demand.
According to PTI, S&P has raised its FY27 GDP growth forecast for India to 7% from 6.6% earlier, while Fitch revised its projection to 6.9% from 6.4%. The ADB has also raised its forecast to 7% from 6.6% projected in July.
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US-based Moody’s Ratings also raised its GDP growth forecast for the fiscal year to 7%, making India the fastest growing among all G20 economies, according to PTI.
The upgrades follow India’s stronger-than-expected economic performance in the June quarter. In Q1FY27, GDP growth accelerated to 7.8%, driven by robust industrial activity, healthy consumption, strong goods exports, and accelerating government investment. Robust industrial activity, resilient consumption, investment demand and growth in manufacturing and services supported the expansion.
S&P sees India growth moderating in H2 FY27
In its Economic Activity for Asia Pacific report, S&P said that despite strong economic performance in Q1FY27, growth is expected to ease in the second half of the fiscal year as the tailwinds from Goods and Services Tax (GST) rationalisation and income tax cuts diminish.
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“Our projection for strong (Asia Pacific) growth doesn’t mask the challenges. Energy prices are likely to remain high in coming months, and monetary tightening in the US will be a hurdle. There is also a risk that AI investment weakens,” S&P said, while hiking its FY27 GDP growth forecast for the region by 20 basis points to 4.6%.
S&P also projected India’s consumer inflation to average 5.1% in FY27.
Fitch sees RBI raising rates by 25 bps in October
In its Global Economic Outlook, Fitch Ratings said that growth in India remains “very strong”, with “very robust” dynamism despite the oil price shock. However, Fitch expects inflation to increase in the short term, with headline inflation at 5.5% in December this year.
“Given the combination of strong demand, price rises, and adverse supply developments, we expect the RBI to raise rates by 25 bps 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, according to PTI.
ADB raises growth outlook, inflation forecast cut to 5%
The ADB’s latest projection of India’s GDP at 7% marks an upward revision of 0.4 percentage points from its July forecast of 6.6% for FY27.
According to PTI, in its Asian Development Outlook (ADO) September 2026, ADB Country Director for India Mio Oka said, “Continued strength in the services sector, including AI-related investments, alongside improvements in agricultural productivity and steady manufacturing growth, will help sustain the growth momentum.”
With regard to inflation, ADB has lowered its FY27 forecast to 5% from 5.2% earlier, saying inflation has risen more gradually than previously anticipated. It expects inflation to ease to 4% in FY28 as energy prices moderate and agricultural supplies recover under a normal monsoon.
The ADB said that although inflation is expected to remain within the RBI’s target range, the central bank may consider raising the repo rate if inflationary pressures intensify.
All eyes on RBI
The Reserve Bank of India is expected to meet on October 6–8. In its previous meeting held on August 6, the RBI said it expects FY 27 growth at 6.7%. while CPI inflation was projected at 5.0% for the year.
The RBI kept the repo rate unchanged at 5.25% and retained its neutral monetary policy stance. The Standing Deposit Facility (SDF) rate remained at 5%, while the Marginal Standing Facility (MSF) and Bank Rate stayed at 5.5%.
With PTI inputs
TOPICSAsian Development BankFitchFitch RatingsGDPGDP growth + 0 MoreThis article was first uploaded on September twenty-three, twenty twenty-six, at forty-nine minutes past three in the afternoon. © IE Online Media Services (P) Ltd