New Delhi: In a positive news, India’s GDP growth forecast for 2026-27 has been raised by S&P Global Ratings. The ratings agency on Wednesday raised the country’s growth rate forecast for the next fiscal to 7.1 per cent.
The country’s growth will be driven by private consumption, investment and exports. The ratings agency, however, said that the West Asia conflict could strain the fiscal position due to increasing energy prices arising from the conflict.
S&P Global Ratings mentioned India’s economic growth projection in its latest quarterly Asia-Pacific economic commentary. The report stated that Indian economy could be affected by renewed geopolitical tensions and persistent trade-related uncertainties and fluctuations in commodity prices, trade volumes, and capital flows.
S&P’s Revised India GDP Growth
The ratings agency also expected fuel prices to go up in India if crude oil remains on the higher side, to contain subsidy costs, but does not foresee a full pass-through.
“We project real GDP growth to moderate to 7.1 per cent in the fiscal year ending in March 2027, compared with 7.6 per cent in fiscal 2026. Key drivers are resilient private consumption, a modest recovery in private investment, and solid exports,” S&P said.
S&P has revised India’s GDP growth in 2025-26 by 0.4 percentage points to 7.6 per cent, and by 0.2 percentage points to 7.1 per cent for 2026-27 fiscal. The ratings agency predicted inflation to increase to 4.3 per cent in the news financial year as it normalises from low levels.
The report warned that if crude prices remain high, it would widen the trade deficit, but a healthy surplus in services trade should help contain the current account deficit.
S&P expects Reserve Bank of India (RBI) to hold rates steady and maintain a neutral stance.
The international ratings agency said the West Asia conflict will have an impact on Asia Pacific region’s economies as many countries majorly import fuel supplies from the Middle East countries.
“Higher energy prices erode purchasing power and depress domestic demand. In countries such as India, Indonesia, Japan, Malaysia, and Thailand, higher prices will force greater spending on subsidies and thereby strain fiscal positions,” it added.
Brent is likely to be around average USD 92 bbl in the June quarter and about USD 80 bbl in 2026.