New Delhi, December 4 (IANS). Fitch Ratings on Thursday raised India’s GDP growth forecast for FY26 to 7.4 per cent, from 6.9 per cent earlier. The reason for this is strong demand and tax reforms in the country.
The Global Rating Agency said that increasing private consumption in the current financial year is giving impetus to the country’s economy. This is being supported by recent GST reforms, earnings growth and positive customer sentiment.
Fitch Ratings believes India’s growth rate will slow to 6.4 per cent in FY27 and will, however, continue to benefit from strong domestic demand.
The Global Rating Agency said that government investment may slow down. However, the second half of FY27 may see a surge in private investment.
India’s real GDP growth is estimated at 8.2 percent in the July-September quarter of FY26.
Fitch said India’s economy has achieved this strong growth rate at a time when the US has imposed tariffs of about 35 percent on Indian exports. Demand is likely to get a big boost from the US-India trade deal.
Fitch estimates that the average inflation rate in India in the current financial year may be 1.5 percent.
He further said that the fall in inflation rate has given the Reserve Bank of India (RBI) another opportunity to cut interest rates on December 5, due to which the repo rate can come down to 5.25 percent.
Fitch further said that RBI is at the end of its interest rate cut cycle and from here the repo rate may remain stable for about two years.
The RBI Monetary Policy Committee (MPC) meeting started on December 3 and will end on December 5 and on the same day RBI Governor Sanjay Malhotra will announce the decisions of the MPC.
The Global Rating Agency believes that the rupee may strengthen against the dollar next year and may reach the level of 87, which is currently around 90.
–IANS
abs/