Fitch Ratings has kept India’s GDP growth at 6.4 per cent for FY27, saying that the ongoing West Asia crisis and global oil situation are likely to slow down the economy in the upcoming quarters this fiscal. 

In a note, the global leader in credit ratings and research said that “We expect GDP growth to ease to 6.4 per cent in FY27, a downward revision of 0.3pp from March”.

Domestic demand will be the main driver of growth, but lower imports in real terms imply positive contributions to growth from net external demand, according to its June Global Economic Outlook.

Fitch expects GDP growth to pick up in FY28 as the Middle East crisis subsides, with stronger consumer spending and investment translating to a growth rate of 6.7 per cent, and ease towards trend growth of 6.4 per cent in FY29.

Fitch Chief Economist Brian Coulton said that the oil price shock is hitting world growth prospects and increasing downside risks.

“But we are also amid a very pronounced boom in global spending on IT and that is cushioning the impact on activity in the near term, particularly in Asia,” he noted.

Fitch said India’s consumer price inflation has not yet risen significantly. “We expect inflation to rise steadily over the months ahead, reaching 5.3 per cent by the end of the year (2026). This reflects a combination of base effects and higher energy prices. Forecasts for below-average monsoon rains and the current heatwave in parts of India raise the risk of even stronger price rises,” Fitch said.

On the Indian rupee, it said “we do not expect a further, significant depreciation in the Indian rupee over the rest of the year”.

The Reserve Bank of India (RBI) last week projected real GDP growth for 2026-27 at 6.6 per cent — with Q1 at 6.6 per cent; Q2 at 6.3 per cent; Q3 at 6.5 per cent; and Q4 at 6.8 per cent — saying that prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook.