TestCloud
Prep • Practice • Perform
Log In

S&P Projects 6.5% GDP Growth for India in FY26 and Warns of Geopolitical Risks.

Economy Business | Dated: 25 Jun 2025

On June 24, 2025, S&P Global Ratings (USA) upgraded India’s GDP (Gross Domestic Product) growth forecast for FY26 to 6.5%, up from its earlier estimate of 6.3%. This revision came through its report titled “Economic Outlook Asia-Pacific Q3 2025: Resilience May Vary”, reflecting optimism over India’s macroeconomic outlook amid global uncertainties.

🎯 Key Highlights:

  • - S&P Global Ratings (formerly Standard & Poor’s) has projected India’s GDP to grow by 6.5% in FY26 (2025–26), citing strong domestic factors like lower oil prices, supportive monetary policy, and favourable taxation measures. The revision aligns with the RBI’s own forecast of 6.5%.
  • - Alongside FY26, S&P also raised India’s FY27 GDP growth estimate from 6.5% to 6.7%, reflecting continued economic momentum. The agency believes that structural reforms, domestic consumption, and global supply chain shifts towards India are key drivers.
  • - The positive outlook is driven by lower crude oil prices, monetary easing (cutting interest rates), income tax relaxations, and a normal monsoon, which collectively support higher rural demand, better inflation control, and capital inflow stability.

💡 Other Important Facts:

  • (i) S&P flagged major risks such as geopolitical tensions in the Middle East and Iran-USA conflict, which could trigger global oil price spikes. With India importing 90% of its crude oil and 50% of natural gas, it remains highly vulnerable to external price shocks.
  • (ii) S&P expects India’s retail inflation to average 4% in 2025, compared to 4.6% in 2024. Additionally, the Indian Rupee (INR) is projected to depreciate to 87.5 per USD by December 2025, down from 86.6 in December 2024, amid global currency pressures.
  • (iii) Despite rising tensions, S&P noted that international energy markets are well supplied. It does not foresee any long-term oil price disruptions, which supports stable import bills and current account management for energy-importing economies like India.

📚 Test Your Knowledge:

S&P Global Ratings recently raised India’s GDP growth forecast for FY26 to what percentage?

Correct Answer: 6.5%

🚀 Quick Recap:

About S&P Global Ratings

  • President : Yann Le Pallec
  • Headquarters : New York City