ADB, OECD, S&P, Fitch raise India’s growth projection
NEW DELHI: The Asian Development Bank and OECD, along with ratings agencies S&P and Fitch, joined Moody’s in raising India’s growth forecast for the current year. ADB and S&P now expect India’s GDP to expand by 7% this year, compared with their earlier projection of 6.6%, while Fitch has pegged its estimate at 6.9%. The sharpest revision was by OECD, which projected 7.1% growth this year, compared with 6.3% in its June outlook.The four agencies expect the monetary policy committee to increase rates in the wake of higher inflation reading. The upgrade in projections follows the first quarter GDP estimates released by the statistics ministry, which estimated that the economy expanded 7.8% during April-June, leading to an upward revision by most economists.While raising its projection from 6.4%, Fitch said: “…the Indian economy has shown resilience in the face of shock from the US-Iran war, despite strong terms-of-trade deterioration seen in first half of 2026. Fitch expects growth to moderate over the remainder of the financial year.” It predicted a 25 basis points (a quarter of a percentage point) increase in interest rates.S&P said that India is seeing strong consumption growth, along with strong investment momentum. “Several factors drove growth to higher levels than we expected in June quarter. These include robust industrial activity, healthy consumption, strong goods exports and acceleration in govt investment. We have consequently upgraded our GDP growth forecast… That said, we expect growth to ease in second half of the fiscal year as tailwinds from GST rationalisation and income tax cuts diminish. Weather-related risks warrant close monitoring. Cumulative rains were 15% below normal till Sept 9, 2026 in the current monsoon season. Agricultural output and food inflation therefore remain key variables to watch.”ADB said India’s growth is supported by resilient consumption, healthy investment and strong services exports, which are expected to offset the drag from higher energy costs and a weaker monsoon.“The economy is projected to grow faster than expected in FY26 as the impact of the Middle East conflict is mitigated by lower supply disruptions than expected due to geographical diversification of energy imports and consumer protection policies,” the latest Asian Development Outlook said. Weak monsoon and West Asia related developments are expected to drive inflation.
