S&P Raises India FY27 Growth Forecast to 7%

S&P Global Ratings raised its forecast for India’s real gross domestic product growth in the fiscal year ending March 31, 2027, to 7% from 6.6%, citing stronger-than-expected economic activity in the June quarter. The agency also expects the Reserve Bank of India to raise its policy rate by 25 basis points during the fiscal year. S&P attributed the upgrade to robust industrial activity, healthy consumption, strong goods exports and accelerating government investment. Government data put growth at 7.8% in the first quarter of FY27, above the rating agency’s expectations. S&P said the pace of expansion could ease in the second half of the fiscal year as the effects of goods and services tax rationalisation and income tax cuts diminish. The growth forecast is an agency projection, not a confirmed outcome. S&P expects consumer inflation to average 5.1% in FY27 and said the balance of considerations could shift toward higher interest rates. Its projected 25-basis-point increase would be a central bank decision; no such action is established in the reported outlook. S&P also identified weather conditions as a risk.