OECD, S&P, Fitch raise India FY27 GDP growth forecasts

Multiple global agencies have raised India's GDP growth forecast for FY27. The OECD raised its projection to 7.1%, the highest among the group, from 6.3% in June, citing resilient domestic demand and government policies cushioning the impact of higher energy prices. S&P Global and Moody's both forecast 7% growth, while Fitch Ratings revised its estimate to 6.9%, up from 6.4%. The Asian Development Bank also raised its forecast to 7%.

The upgrades follow India's stronger-than-expected 7.8% GDP growth in the June quarter, driven by robust industrial activity, consumption, and government investment. However, most agencies expect growth to moderate in the second half of the year due to factors like below-normal monsoon rains, rising inflation, and diminished tailwinds from tax cuts. Fitch and the OECD anticipate the RBI may raise interest rates by 25 basis points in October to counter inflationary pressures, with Fitch forecasting a hike to 5.5%.

The RBI's own FY27 growth estimate remains at 6.7%. The agencies flagged risks including prolonged geopolitical uncertainty from the Middle East conflict, elevated energy prices, and potential impacts on agricultural output.