Purbalee Dutta 
Fitch Ratings has raised its forecast for India’s economic growth in FY26 to 7.4 percent, up from its earlier projection of 6.9 percent, attributing the revision to stronger-than-anticipated private consumption. According to the agency, consumer spending has been the principal engine driving growth this year, supported by rising real incomes, improved consumer confidence, and the effects of recently implemented goods and services tax (GST) reforms. This upward revision comes on the back of India’s robust GDP growth of 8.2 percent in the second quarter, marking the fastest expansion in six quarters.
Looking ahead to FY27, Fitch anticipates growth to moderate to 6.4 percent, aligning more closely with the economy’s potential output. Domestic demand, particularly private consumption, is expected to remain the primary contributor to growth. Public investment is likely to slow, reflecting fiscal adjustments, while private investment is projected to strengthen during the latter half of FY27 as financial conditions ease. Overall, the agency highlights that strong consumer spending will continue to underpin India’s economic expansion, even as growth gradually returns to more sustainable levels in the medium term.
About The Author
