S&P Global Ratings on Tuesday retained India's GDP growth forecast at 6.5 per cent in the current fiscal, citing strong domestic demand amid a favourable monsoon.
S&P also said it expects a 25 bps rate cut by the RBI this fiscal as it revised its inflation forecast down to 3.2 per cent for this fiscal year. India's GDP grew at 7.8 per cent in the April-June quarter.
"We forecast India's GDP growth to hold steady at 6.5 per cent this fiscal year (year ending March 31, 2026). We expect domestic demand to remain strong, supported by a largely benign monsoon season, cuts in income tax and goods and services tax and accelerating government investment," S&P said in a statement.
Also read: S&P cuts India's FY26 GDP growth forecast to 6.5 pc
S&P said a sharper-than-expected decrease in food inflation will help keep inflation low in the current year. "This leaves room for further monetary policy adjustments, and we anticipate a 25 bps rate cut by the Reserve Bank of India this fiscal year," it said.
In its “Economic Outlook Asia-Pacific Q4 2025: Growth to ease on external strain” report, S&P said that across the region, relatively resilient domestic demand should dampen the impact from stronger external headwinds following the increase in US import tariffs and slower global growth.
US tariffs on imports from different Asian economies will shape both their export outlook and their role in regional supply chains. "Relative to our June assumptions on US tariffs, China has so far fared somewhat better than other Asian economies, and Southeast Asian emerging markets somewhat worse. India has been hit much harder than expected," S&P said.
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