NEW DELHI, Sep 23: Global credit rating agencies are becoming more optimistic about India’s economic growth, with S&P Global Ratings, Fitch Ratings and Moody’s raising their forecasts for the country’s GDP growth in FY27, citing stronger-than-expected domestic activity and resilience against external shocks.
S&P Global Ratings has raised its FY27 growth forecast for India to 7 per cent from 6.6 per cent, while Fitch Ratings has revised its projection to 6.9 per cent from 6.4 per cent. Moody’s had earlier raised its forecast to 7 per cent from 6 per cent.
The revisions follow stronger-than-expected economic data for the April-June quarter. India’s GDP expanded 7.8 per cent year-on-year during the quarter, exceeding expectations and prompting analysts to reassess the pace of growth for the full financial year.
S&P attributed the strong quarterly performance to robust industrial activity, resilient consumption, stronger goods exports and an acceleration in government investment.
Fitch also cited the better-than-expected June quarter performance, saying the economy had remained resilient despite external pressures, including the impact of the US-Iran conflict and deterioration in the country’s terms of trade.
Domestic consumption provides cushion
A key factor behind the upgraded forecasts is the strength of domestic consumption. India’s relatively large domestic market provides a buffer when global trade conditions weaken or geopolitical tensions increase.
S&P identified strong consumption growth as one of the factors supporting its revised outlook. Investment activity has also remained comparatively strong, with the agency pointing to India’s investment momentum as one of the stronger performers in the Asia-Pacific region.
Economists have similarly highlighted domestic demand as an important support for growth. Relatively limited transmission of higher global energy prices to domestic fuel prices, along with moderate underlying inflation, has helped protect household purchasing power.
Investment gains importance
Government capital expenditure has continued to support economic activity, while indicators suggest private investment is also gaining momentum.
Fitch expects investment to increase by more than 10 per cent during FY27. The ratings agency has also pointed to robust bank credit growth,
