S&P Global Ratings has adjusted its economic growth forecasts for India, maintaining its
FY25 GDP growth estimate at 6.8% but revising projections for FY26 and FY27 downward
by 20 basis points to 6.7% and 6.8%, respectively.
The agency attributed the reduced estimates to high interest rates and a decrease in fiscal
stimulus, which are expected to dampen urban demand. While purchasing manager indices
continue to show resilience, other metrics indicate a temporary loss of momentum,
particularly following a slowdown in the construction sector during the September quarter.
India’s central bank has projected a 7.2% GDP growth rate for FY25, while the economy
posted an 8.2% growth in FY24.
S&P Global also highlighted challenges arising from climate-related disruptions and supply
chain shocks in agriculture. These factors are contributing to rising food prices, complicating
the nation’s inflationary landscape.
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