S&P Lifts India’s FY26 GDP Outlook to 6.5%
India’s economic trajectory has received a major boost with S&P Global Ratings revising its GDP growth forecast for FY2025–26 to 6.5%, up from earlier projections. The upgrade reflects growing optimism over India’s domestic economic stability, even as the global economic environment remains volatile.
Strong Domestic Demand Fuels Growth
S&P cited a combination of favorable domestic conditions driving this revised outlook. A normal monsoon, steady crude oil prices, and signs of softening inflation are key contributing factors. India’s domestic consumption and infrastructure-driven investment are playing a central role in shielding the economy from external headwinds.
The ratings agency emphasized that India’s relatively low reliance on exports, compared to other Asian economies, is helping it maintain momentum while global growth slows.
Inflation Tamed, Rupee Steady
Inflation is projected to remain in the 3.7% to 4.0% range, aided by easing food prices and energy costs. S&P noted that while Middle East tensions pose some risks to oil markets, global energy supply conditions remain manageable. As a result, the rupee is expected to remain largely stable, even amid ongoing geopolitical tensions.
The agency added that monetary policy in India may begin easing, supporting credit flow and further stimulating economic activity in the coming quarters.
Global Pressures, Local Resilience
While acknowledging risks such as trade frictions, U.S. tariff uncertainty, and conflict-driven oil price volatility, S&P believes India is insulated to a significant extent due to strong household spending, resilient corporate balance sheets, and government capital expenditure.
This forecast echoes confidence expressed by other economic think tanks and financial institutions, who similarly peg India’s FY26 growth potential at 6.2–6.5%, indicating broad consensus on the country’s medium-term resilience.
