Fitch Ratings Raises India’s GDP Growth Forecast

New Delhi: Leading rating agency Fitch Ratings on Friday raised India’s gross domestic product or GDP growth forecast for current fiscal and the next to 7.5 per cent and 6.7 per cent, and projected global crude oil price to average $70/barrel in 2026, according to its Global Economic Outlook- March 2026. Fitch had, in December, projected India’s GDP growth for current fiscal at 7.4 per cent and 6.4 per cent for 2026-27. However, the rating agency expects growth to slow in the first half of FY27, with rising inflation constraining real incomes and limiting consumer-spending growth.
The country’s economy slowed in the December quarter to 7.8 per cent year-on-year (YoY) from 8.4 per cent in September quarter. “We estimate that for the 2025-26 financial year (starting April 2025), growth will be 7.5 per cent, a marginal upward revision from December. Domestic demand is the biggest growth driver this year, with consumer spending and investment rising by (an estimated) 8.6 per cent and 6.9 per cent in the current fiscal year,” Fitch said.
Fitch also projected world GDP growth at 2.6 per cent in 2026 on the assumption that the Iran war does not result in a larger or an enduring spike in energy prices that pushes the annual 2026 oil price forecast above $70/barrel, while global growth last year was 2.7 per cent. “But a scenario where oil prices rise to $100 and stay there would be a significant adverse global supply shock,” Fitch Ratings chief economist Brian Coulton said.
Fitch also said that oil prices have risen by $20/barrel to around $90 (Brent) since the US and Israel attacked Iran at the end of February. Fitch’s baseline assumption in the outlook report is that oil prices remain in the $90-100 range through March – as the Strait of Hormuz remains effectively closed for around a month – before falling to the mid USD 60s by second half of 2026 in a fundamentally oversupplied market.
“This implies an annual average price of $70 in 2026, up from $63 in the December GEO. We believe this revision would not have a material impact on global growth, inflation or monetary policy,” Fitch said, adding, “However, there are huge uncertainties and there is a possibility of more sustained disruptions to oil shipments and significant damage to production facilities in West Asia.” With regard to India, Fitch said that there are tentative signs that real activity is slowing in January and February, but the economy remains resilient, and credit growth is still in double digits. A comprehensive revision of national accounts data including a re-basing of the base year to 2022-23, from 2011-12 earlier, has resulted in a smoother path for real GDP, with growth in 2023-24 and 2024-25 now estimated at 7.2 per cent and 7.1 per cent, respectively, rather than 9.2 per cent and 6.5 per cent in the previous national accounts. “We expect investment growth to ease in the short-term but recover in sequential terms from the second half of next fiscal with looser financial conditions and lower real interest rates,” it said.