By Madhusudan Sahoo
Copyright deccanchronicle
Betting big on India’s growth story, global ratings agency Fitch on Wednesday raised its economic growth forecast for the fiscal year ending March 2026 (FY26) to 6.9 per cent from 6.5 per cent earlier. The upgrade follows stronger-than-expected performance in the second quarter of 2025, when real GDP expanded 7.8 per cent year-on-year, surpassing Fitch’s earlier projection of 6.7 per cent. In its September global economic outlook, Fitch noted that economic activity picked up sharply between the March and June quarters. It flagged, however, that trade frictions with the US have escalated, with Washington imposing an additional 25 per cent tariff on Indian imports. Since August 27, Indian goods entering the US face a 50 per cent duty. “We expect this will eventually be negotiated lower, but the uncertainty around trade relations will dampen business sentiment and potentially investment,” Fitch said. The agency added that recent Goods and Services Tax (GST) reforms, effective September 22, should provide a modest boost to consumer spending over the rest of this year and the next. Domestic demand, Fitch underlined, will remain the primary driver of growth. Strong real income trends are expected to support household consumption, while easier financial conditions could encourage investment. Still, the agency cautioned that growth may slow in the second half of the financial year (October–March). Fitch’s FY26 estimate is the most optimistic among major agencies. The Union finance ministry’s economic survey has projected growth in the 6.3–6.8 per cent range. The Reserve Bank of India, Asian Development Bank, and S&P Global Ratings each see FY26 growth at 6.5 per cent. Moody’s forecasts 6.3 per cent growth in the 2025 calendar year, while the International Monetary Fund and World Bank peg India’s GDP expansion at 6.4 per cent and 6.3 per cent, respectively.
