Fitch Ratings has revised India’s growth outlook upward, projecting the economy to expand 6.9% in FY25, up from its earlier estimate of 6.5%. The revision comes on the back of stronger-than-expected GDP growth in the April–June quarter and resilient domestic consumption, according to the agency’s September edition of the Global Economic Outlook (GEO).
Fitch Raises India GDP Forecast to 6.9% for FY25
India’s real GDP grew 7.8% year-on-year in the April–June quarter, compared to 7.4% in the previous quarter. Fitch had earlier estimated 6.7% growth for Q1 in its June GEO report. The agency said robust consumer demand and supportive income trends were major factors driving the upward revision.
Trade Tensions with US Add Uncertainty
While India’s domestic growth momentum remains strong, Fitch flagged rising trade frictions with the United States as a risk. The US recently imposed an additional 25% tariff on Indian goods, effective August 27, raising total duties to 50%. Fitch expects these tariffs to be negotiated lower eventually but cautioned that uncertainty may dampen investor sentiment and slow new investments.
GST Reforms to Boost Consumption
Fitch highlighted that the Indian government’s Goods and Services Tax (GST) reforms, set to take effect on September 22, should modestly enhance consumer spending through FY25 and FY26. Looser financial conditions are also expected to encourage investment, supporting domestic demand as the primary growth driver.
Outlook for FY26–FY28 and RBI Policy
- Growth is projected to moderate to 6.3% in FY26 and further to 6.2% in FY28.
- Inflation is expected to stay under control, with price pressures remaining weak due to healthy food stockpiles and above-average monsoon rainfall. Fitch projects inflation at 3.2% by end-2025 and 4.1% by end-2026.
- Fitch anticipates the RBI will cut rates by 25bps towards the end of 2025 and maintain that stance until 2026, before resuming rate hikes in 2027.
Get Latest News Live on MTIMES along with Breaking News and Top Headlines, Political News and around The World.
You May Like
Trending Searches Today |
Congress Criticises Government’s GST Reform, Says True GST 2.0 Reform in India Still Awaited
SSC CGL New Exam Date 2025 Out: Tier 1 Scheduled from 12th to 26th September
OSSSC Re-Conducts Preliminary Exam 2023: RI, ARI, Amin, Supervisor and SFS Posts from October 8
56th GST Council Meeting: Big GST Rate Cuts Announced, Focus on Common Man and Key Sectors
Undersea Cable Cuts in Red Sea Disrupt Internet Across Asia and Middle East
- INDUSTRY-LEADING FABRIC & PREMIUM MATERIALS: Crafted using high-quality, durable fabric and superior materials that offe…
- COMFORTABLE STRAPS – NO RASHES, NO DISCOMFORT: Designed with soft, skin-friendly straps that ensure all-day comfort. Whe…
- WATER-RESISTANT OUTER FABRIC: Built with water-resistant material to protect your essentials from rain, splashes, and ou…
- High performance – Snapdragon 4 Gen 2 5G Processor | Large 17.47cm 120Hz Display | Upto 8GB RAM including 6GB Virtual RA…
- Display: Large 17.47 cm 120Hz Refresh Rate display | 600nits peak brightness | 240Hz Touch sampling Rate | TUV triple ce…
- Camera: 50MP Dual camera | 5MP Front camera
- Galaxy AI and Now Brief – Enter the new era of 5G smartphone AI with a companion that stays one-step ahead of your needs…
- Gemini Live – Get real-time answers and ideas with Gemini Live. Chat freely, attach images, and prepare for presentation…
- Ultra Wide Camera – Capture razor-sharp details from Wide to Telephoto and even Ultra Wide. Whether shooting landscapes …