India GDP outlook: Goldman Sachs lowers FY26 growth to 6.5%, Fitch expects gradual cooling
&imwidth=600&imheight=450&format=webp&quality=medium "India GDP outlook: Goldman Sachs lowers FY26 growth to 6.5%, Fitch expects gradual cooling")
For representative purpose only Photograph: (Pexels)
Goldman Sachs has cut India’s FY26 GDP forecast to 6.5% while Fitch sees gradual slowdown ahead, even as Q3 growth beats expectations
Goldman Sachs has lowered India’s GDP growth forecast for FY26 to 6.5% from 7%, according to a report cited by Bloomberg on Friday (March 13). Meanwhile, Fitch Ratings expects India’s economy to grow at 7.5% in FY26 but sees the pace moderating to 6.7% in FY27. Goldman Sachs also estimates inflation to rise to 4.2% from 3.9%, while Fitch projects inflation could climb to 4.5% by December due to rising crude oil prices.
For the remainder of the current fiscal year, Fitch expects domestic demand to remain the key driver of economic expansion. However, it projects growth to slow to 6.7% in FY27 and further to 6.5% in FY28. The rating agency also expects interest rates to remain unchanged in FY27 and FY28.
India's Q3 FY26 GDP
India’s economy expanded by a strong 7.8% in the October–December quarter of the current financial year, according to the first official data released under the government’s revised framework for calculating national output. The growth figure was higher than the 7.6% estimate projected by economists tracked by Bloomberg. Despite global trade tensions and geopolitical challenges, India continues to be one of the fastest-growing major economies. The government has also revised the GDP base year to 2022–23 from 2011–12 to better reflect evolving production and consumption patterns in the economy.
Under the updated series, the government revised the FY26 GDP growth estimate to 7.6%, up from the earlier projection of 7.4%. The Economic Survey has also revised its FY27 growth projection upward to 7%–7.4% under the new series, compared with 6.8%–7.2% under the earlier series, Chief Economic Advisor V Anantha Nageswaran informed in a press briefing. "As per projections, India is on track to cross $4-trillion GDP mark in 2026-27," the CEA added.
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Earlier in FY26, the economy recorded an 8.2% expansion in the second quarter despite US tariffs reaching as high as 50% on certain Indian imports. Lower inflation also helped narrow the gap between nominal and real growth rates, with nominal GDP rising 8.9% during the December quarter.
