Fitch Cuts India FY27 Growth Forecast To 6.4%
Fitch Ratings has cut India’s FY27 GDP growth forecast to 6.4% from its earlier estimate of 6.7%, citing pressure from the US-Iran war, higher oil prices and weaker consumer spending.
Fitch India GDP Forecast Cut
The rating agency said India’s economic growth is expected to slow from 7.4% in FY26 to 6.4% in FY27. The revision reflects concerns that rising prices could erode real incomes and reduce household consumption.
Fitch said domestic demand will remain the main driver of growth, while lower real imports may support the economy through a positive contribution from net external demand.
US-Iran War Impact On Indian Economy
Fitch said the slowdown is likely to be most visible in the September and December quarters of FY27. Higher fuel prices linked to the US-Iran war are expected to increase inflation pressure and affect consumer spending.
The agency has raised its Brent crude oil price assumption for 2026 to $87 per barrel from $70 per barrel estimated earlier.
Inflation And RBI Rate Outlook
Fitch said India’s consumer inflation has not risen sharply yet, but price pressure is building. It expects inflation to reach 5.3% by the end of the calendar year.
The agency also expects the Reserve Bank of India to raise the policy rate once this year to 5.5% to manage rising price pressure. For FY28, Fitch expects India’s GDP growth to recover to 6.7% as the energy shock eases.
