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S&P Global Ratings raised India’s FY27 GDP growth forecast to 7% on Wednesday, September 23, 2026. The ratings agency lifted its earlier 6.6% estimate after stronger economic activity exceeded expectations.
The upgraded S&P India GDP forecast reflects strong consumption, industrial activity, goods exports and government investment. S&P also expects the Reserve Bank of India to raise rates by 25 basis points during FY27.
India recorded 7.8% growth in the June quarter, supporting the stronger FY27 GDP growth outlook. S&P expects economic momentum to remain firm before moderating later in the fiscal year.
S&P linked the expected slowdown to fading benefits from GST rationalization and recent income tax cuts. The agency also highlighted several risks that could affect future growth.
Consumer inflation could average 5.1% during FY27, according to S&P Global Ratings’ latest economic outlook. Persistent price pressures could therefore influence the RBI’s monetary policy decisions.
S&P said, “We expect the balance of considerations to shift toward higher interest rates.” The agency cited strong growth, inflation pressures, West Asia tensions and weather risks.
Weather conditions remain another concern for India’s inflation and agricultural outlook during FY27. Cumulative rainfall stood 15% below normal through September 9, S&P noted.
Lower rainfall could pressure agricultural output while keeping food inflation under close watch. Higher energy prices could also add pressure to inflation and the rupee.
The latest forecast places S&P above the RBI’s 6.7% FY27 GDP projection and Fitch Ratings’ 6.4% estimate. Moody’s also expects India’s FY27 growth to reach 7%, according to recent reports.
S&P expects India’s growth to reach 7.2% in FY28 before easing toward 7% in FY29. The outlook keeps domestic consumption and investment central to India’s growth trajectory.
The RBI rate hike outlook adds another layer to the FY27 economic picture. Strong growth could coexist with tighter monetary conditions as policymakers monitor inflation and external risks.
Also Read: India’s GST Revenue Grows 11%: What Drove the Record Growth?
