New Delhi, 23 September (H.S.): Following Moody’s Ratings, Fitch Ratings on Wednesday raised its forecast for India’s gross domestic product (GDP) growth in the current financial year 2026-27 to 6.9 per cent from its earlier estimate of 6.4 per cent. The rating agency cited stronger-than-expected economic growth in the April-June quarter and the overall resilience of the Indian economy.

Fitch said India’s GDP is expected to expand by 6.9 per cent in FY2026-27, up from the 6.4 per cent forecast it had issued in June. The agency noted that the 7.8 per cent year-on-year growth recorded in the April-June quarter demonstrated the resilience of the Indian economy despite a significant deterioration in terms of trade during the first half of 2026 and the shock arising from the US-Iran conflict.

The rating agency said prospects for private investment appeared stronger and projected investment growth of more than 10 per cent. Non-food credit growth stood at 19 per cent year-on-year in July, indicating continued momentum in credit activity.

However, Fitch expects the pace of economic expansion to moderate during the remainder of the financial year. It pointed to a slower pace of activity in the manufacturing and services sectors, below-normal monsoon rainfall and its potential impact on agriculture and rural demand, as well as rising inflation that could weigh on household purchasing power and consumer spending.

Fitch also said that, in view of strong demand, rising prices and adverse supply-side developments, it expects the Reserve Bank of India (RBI) to raise the policy rate by 25 basis points to 5.5 per cent at its October monetary policy meeting. The agency expects a further increase to 5.75 per cent in early 2027, followed by a reduction to 5.5 per cent in 2028.

The Indian economy grew by 7.8 per cent in FY2025-26, while GDP expanded by 7.8 per cent in the April-June quarter of FY2026-27. Earlier, Moody’s Ratings had also raised its forecast for India’s FY2026-27 GDP growth from 6 per cent to 7 per cent, citing the economy’s resilience amid external shocks.

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Hindusthan Samachar / Jun Sarkar