(AI image/IANS)
New Delhi, September 23 (IANS) Driven by several positive factors, S&P Global Ratings on Wednesday raised India’s GDP growth forecast to 7 per cent for FY27, from 6.6 per cent in its earlier projection.
The upgrade in India’s GDP outlook was due to robust industrial activity, healthy consumption, strong goods exports, and accelerating government investment, said the ratings agency.
“Several factors drove growth to higher levels than we expected in the June quarter. We have consequently upgraded our GDP growth forecast for the current fiscal year, ending March 31, 2027, to 7.0 per cent, from 6.6 per cent previously,” S&P Global Ratings said in its note.
That said, “we expect growth to ease in the second half of the fiscal year as the tailwinds from General Sales Tax rationalisation and income tax cuts diminish,” it added.
Weather-related risks warrant close monitoring. Cumulative rains were 15 per cent below normal till September 9, 2026, in the current monsoon season.
Agricultural output and food inflation therefore remain key variables to watch, it noted.
The government's latest GDP data pegged growth at 7.8 per cent in the first quarter of FY27. The strong expansion has prompted a series of upward revisions of growth forecasts.
Meanwhile, emerging market GDP growth averaged 5.2 per cent year on year in the second quarter.
For China, the ratings agency forecasts 4.3 per cent real GDP growth in 2026 and 2027.
“The primary risk is that external or policy shocks could trigger a sharp slowdown, which would then be worsened by a fall in confidence,” the ratings agency said.
Consumption and investment in China have remained very subdued through August. Several factors explain the decline: A relentless slide in the housing market, weak confidence, and a fiscal contraction in the first seven months of 2026, according to the note.
“Across Asia-Pacific we expect growth to hold up amid a boom in tech exports and macroeconomic policy that is supporting domestic demand. Our baseline 2026 GDP growth forecast for Asia-Pacific is 4.6 per cent, 0.2 percentage points higher than a quarter ago. We see 2027 growth at 4.4 per cent,” it said.
