In December 2025, the global rating agency, Fitch Ratings Inc., released its latest report titled Global Economic Outlook (GEO)-December 2025. This report has raised India’s Gross Domestic Product (GDP) forecast for the Financial Year 2025-26 (FY26) to 7.4%, up from its previous estimate of 6.9%.
The report highlights that private consumer spending is the primary driver of India’s GDP growth this year. This rise is supported by robust real income dynamics, enhanced consumer sentiment, and the positive effects of recent GST reforms.
According to the report, India's GDP growth rate is projected to slow to 6.4% in FY27. Despite this slowdown, domestic demand will continue to fuel growth, particularly in consumer spending.
For FY28, India’s GDP growth rate is expected to ease to 6.2%. This decline is attributed to higher imports, which may offset the slightly stronger domestic demand.
The agency forecasts that India's inflation will average 1.5% in FY26, increasing to 4.4% in FY27. Notably, consumer inflation dropped to an all-time low of 0.3% in October 2025, largely due to decreased food prices.
Fitch Ratings has marginally increased its global growth rate forecast by 10 basis points, from 2.4% (projected in September’s GEO 2025) to 2.5% for Calendar Year 2025 (CY25). However, this is expected to moderate to 2.4% in CY26. These projections remain lower than last year’s growth rate of 2.9%.
Q1. What is Fitch Ratings’ GDP forecast for India in FY26?
Answer: Fitch Ratings projects India’s GDP growth at 7.4% for FY26, which is an increase from the previous estimate of 6.9%.
Q2. What factors are driving India’s GDP growth according to the report?
Answer: The main driver of India’s GDP growth is private consumer spending, supported by robust real income dynamics and improved consumer sentiment.
Q3. What are the inflation projections for India in FY26 and FY27?
Answer: Fitch Ratings expects India’s inflation to average 1.5% in FY26 and increase to 4.4% in FY27.
Q4. How does global growth rate compare to last year?
Answer: Fitch Ratings forecasts a global growth rate of 2.5% for CY25, which is lower than last year’s growth rate of 2.9%.
Q5. What is the expected GDP growth rate for India in FY28?
Answer: The GDP growth rate for India is projected to ease to 6.2% in FY28, primarily due to higher imports.
Question 1: What is the projected GDP growth rate for India in FY26 according to Fitch Ratings?
A) 6.4%
B) 7.4%
C) 6.2%
D) 6.9%
Correct Answer: B
Question 2: Which factor is identified as the main driver of India’s GDP growth in FY26?
A) Government spending
B) Private consumer spending
C) Export growth
D) Foreign investment
Correct Answer: B
Question 3: What is the expected average inflation for India in FY26?
A) 1.5%
B) 4.4%
C) 0.3%
D) 3.0%
Correct Answer: A
Question 4: How much is the global growth rate forecasted for CY25?
A) 2.4%
B) 2.5%
C) 2.9%
D) 3.0%
Correct Answer: B
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