Fitch Ratings has upgraded India’s GDP growth forecast from 6.9% to 7.4%, citing stronger-than-expected economic momentum driven by rising household incomes, improved consumption and the recent rationalisation of GST rates. In its latest Global Economic Outlook report, Fitch notes that although growth may moderate by March 2026 compared to earlier quarters, the full-year projection has been revised upward due to stronger domestic demand.
The agency expects 8.2% growth in the June–September quarter, up from the earlier estimate of 7.8%. Consumption has benefited from lower food prices, easing inflationary pressures, and a revival in consumer spending. The GST rate cuts across 375 goods in September have also stimulated demand.
Fitch projects that growth may soften to 6.4% in FY27 as household spending and domestic demand stabilise, and to 6.2% in FY28 amid higher imports and tighter fiscal discipline. Public capex may decelerate, but private investment is likely to pick up as financial conditions improve.
With inflation declining to historic lows—0.3% in October—and food prices easing due to surplus supplies, the RBI may have room for another rate cut in December, potentially lowering the policy rate to 5.25%. Fitch believes the central bank is near the end of its easing cycle, with stable rates expected over the next two years.
