India’s GDP Growth Outlook: Moody’s, S&P, Fitch, and OECD Increase FY27 Projections
NEW DELHI: Major global institutions have upgraded India’s growth outlook, with the OECD, S&P Global Ratings, Fitch Ratings, and the Asian Development Bank (ADB) raising their GDP forecasts for the current financial year. The revisions come after India’s GDP expanded by 7.8% in the April-June quarter, driven by strong domestic demand, investment, and government spending, despite challenges from the West Asia conflict and rising energy prices.
The OECD has increased its FY2026-27 growth forecast for India to 7.1%, up from 6.3% projected in June. This 80-basis-point upgrade positions the OECD’s forecast above those of S&P, Moody’s, and ADB, all at 7%, while Fitch anticipates a growth rate of 6.9%. The Reserve Bank of India estimates FY27 growth at 6.7%, compared to the economy’s 7.8% growth in FY26.
In its September Interim Economic Outlook, the OECD noted that growth in emerging markets like India is supported by resilient domestic demand and government policies that mitigate the impact of higher energy prices. However, it warned that reduced purchasing power could weaken growth in the latter half of the year, projecting a decline from 7.8% in FY 2025-26 to 7.1% in FY 2026-27 and 6.5% in FY 2027-28. The OECD also expects inflation in India to average 4.7% in 2026.
S&P Global Ratings has raised its FY27 growth forecast to 7%, up from 6.6%, citing robust industrial activity and government investment. The agency anticipates a slowdown in growth during the second half of the fiscal year as the effects of GST rationalization and income tax cuts diminish. S&P projects consumer inflation at 5.1% for FY27 and suggests the Reserve Bank of India may raise its policy rate by 25 basis points during the fiscal year.
Fitch Ratings has also increased its FY27 growth forecast to 6.9%, from 6.4%, attributing the change to strong growth in the June quarter and the resilience of the Indian economy. The agency expects private investment to strengthen, with investment growth projected at over 10%. Fitch predicts a 25 basis point rate hike by the Reserve Bank of India in October, with inflation expected to rise to 5.5% by December 2026.
The Asian Development Bank has similarly raised its FY27 growth forecast to 7%, from 6.6%, citing stronger-than-expected performance in the first quarter, robust investment, and solid growth in manufacturing and services. The ADB expects domestic demand to remain the main driver of growth, supported by tax collections and rising household incomes.
Moody’s Ratings also raised its FY27 real GDP growth forecast to 7% from 6%, highlighting India’s resilience amid geopolitical tensions. However, it cautioned that elevated energy prices and potential food price pressures could impact inflation and growth. India’s economy grew by 7.8% in the April-June quarter, with strong investment and manufacturing activity offsetting weaknesses in other sectors.
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