New Delhi : Fitch Ratings raised India’s growth forecast for FY26 to 6.9 per cent, citing robust domestic demand and rising investments, according to the latest ‘Global Economic Outlook’ released on Wednesday.
India recorded a 7.8 per cent growth in Q2 2025, prompting Fitch to revise its previous FY26 projection of 6.5 per cent. The report highlighted that strong real income growth will drive domestic demand, while looser financial conditions should encourage investments.
Fitch expects India’s growth to moderate slightly over the next two years, estimating 6.3 per cent in FY27 and 6.2 per cent in FY28 as the economy operates slightly above potential. The rating agency anticipates that the Reserve Bank of India (RBI) will cut rates by 25 basis points towards the end of the year and maintain them until the end of 2026, before gradually raising rates in 2027.
Globally, Fitch raised its 2025 world growth forecast to 2.4 per cent, driven by stronger data from China and the eurozone. Fitch revised China’s 2025 growth forecast to 4.7 per cent, up from 4.2 per cent, and lifted the eurozone’s to 1.1 per cent from 0.8 per cent. The US economy is projected to grow 1.6 per cent, slightly higher than the previous 1.5 per cent estimate.
For 2026, Fitch projects global growth at 2.3 per cent. Brian Coulton, Chief Economist at Fitch, said that US tariff hikes will reduce global growth, and hard data now show signs of a slowing US economy. The Federal Reserve will likely deliver two 25-basis-point cuts in September and December 2025, followed by three more in 2026.
Fitch also warned that rising price pressures in the US could curb real wage growth and weaken consumer demand as job growth slows.
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