Fitch upgrades India's FY27 growth forecast to 6.9% on economic resilience

Fitch Ratings upgraded India's fiscal year 2027 GDP growth forecast to 6.9 per cent on Wednesday, up from its previous estimate of 6.4 per cent. The revision reflects robust economic performance in the June quarter and the Indian economy's demonstrated resilience amid external challenges.

India's economy expanded at 7.8 per cent in the June quarter, signalling underlying strength despite geopolitical shocks and adverse commodity price movements in the first half of 2026. The rating agency attributed the upward revision to this sustained growth momentum and confidence in the economy's structural fundamentals.

However, Fitch cautioned that growth is expected to moderate through the remainder of the fiscal year. The agency pointed to several headwinds: PMI survey data suggesting slower expansion in both manufacturing and services sectors; below-normal monsoon rainfall threatening agricultural output and rural demand; and rising inflation pressuring real incomes and consumer spending patterns.

On monetary policy, Fitch anticipates the Reserve Bank of India will increase interest rates by 25 basis points at its October policy meeting, reflecting inflation management priorities even as growth moderates. The agency noted that while private investment prospects appear resilient, macroeconomic conditions are becoming more challenging than the strong June quarter performance might suggest.