๐๐ถ๐๐ฐ๐ต ๐๐๐๐ ๐๐ป๐ฑ๐ถ๐ฎ'๐ ๐๐ฟ๐ผ๐๐๐ต ๐๐ผ๐ฟ๐ฒ๐ฐ๐ฎ๐๐ ๐ง๐ผ ๐ฒ.๐ฐ% ๐ข๐ป ๐ ๐ถ๐ฑ๐ฑ๐น๐ฒ ๐๐ฎ๐๐ ๐ง๐๐ฟ๐บ๐ผ๐ถ๐น
Fitch Ratings lowered India's GDP growth forecast for FY27 to 6.4%. The agency had projected 6.7% earlier. The downgrade follows rising oil prices linked to the US-Iran conflict.
The economy grew 7.4% in FY26. Domestic demand will support growth, but higher prices are reducing household spending power. Fuel prices rose 4-5% in recent weeks. Fitch expects the impact to show most during the second and third quarters of FY27.
The Reserve Bank of India also lowered its growth forecast for the current fiscal year to 6.6%. It raised its inflation estimate to 5.1%.
Key projections from Fitch:
- FY27 GDP growth: 6.4%
- FY28 GDP growth: 6.7%
- FY29 GDP growth: 6.4%
- Brent crude average for 2026: $87 per barrel, up from $70
- Global growth for 2026: 2.4%, down 0.2 percentage points
Investment activity stays resilient. Fitch expects lower imports in real terms to help net external demand add positively to growth.
Inflation in India has not risen sharply yet. Wholesale prices increased 8.3% year-on-year in April. CPI inflation stood at 3.5%. Fitch expects inflation to hit 5.3% by the end of the calendar year. Poor monsoon rains and heatwaves raise the risk of higher prices.
The RBI held its policy rate at 5.25% in April. Fitch expects one rate hike to 5.5% this year to fight inflation from the supply shock.
Fitch expects the Indian rupee to average 97.50 against the US dollar this fiscal year. The agency does not expect a further large drop.
The Strait of Hormuz has stayed closed for 14 weeks. Fitch assumes it will not reopen before July.