S&P keeps India's FY25 growth forecast at 6.8%

S&P Global Ratings Monday retained its growth forecast for the Indian economy at 6.8% for this fiscal year while lowering the projection for the next two years. The rating agency cut the GDP forecast for FY26 to 6.7% from 6.9%, and for FY27 to 6.8% from 7%.

S&P expects India's GDP growth to ease this fiscal year due to prevailing high interest rates and reduced fiscal support, dampening urban demand.

The agency had projected India's FY25 GDP growth at 6.8% in late September.


The Indian economy grew by 8.2% last fiscal.

The Reserve Bank of India, in its latest monthly bulletin, noted that the slack in the Indian economy in the recent quarter is behind us. The central bank has projected a growth of 7.2% for FY25.

The Purchasing Managers Indices (PMI) are forecasting an expansion for the Indian economy this fiscal, according to a report titled 'Economic Outlook Asia-Pacific Q1 2025: US Trade Shift Blurs the Horizon' released on Monday.

However, few high-frequency indicators suggest a softening of growth momentum due to a downturn in the construction sector in the September quarter, the report said.