S&P Ups India’s FY26 GDP Forecast to 6.5% Amid Strong Rural Demand & Falling Oil Prices
S&P Ups India’s FY26 GDP Forecast to 6.5% Amid Strong Rural Demand & Falling Oil Prices
S&P Ups India’s FY26 GDP Forecast: S&P Global raises India’s FY26 GDP growth forecast to 6.5%, citing strong rural demand, normal monsoon & falling oil prices. Inflation is seen at 3.7%.
A foreign agency acknowledged India’s strength! Predicted explosive growth in FY26. India’s economic picture seems to be improving further. Rating agency S&P Global has raised India’s GDP growth forecast for the financial year 2025–26 (FY26) to 6.5%. This is 0.2% higher than the earlier estimate. The agency has made this revision based on the expectation of normal monsoon, fall in crude oil prices, and strong domestic demand.
This estimate coincides with the 6.5% growth forecast of the Monetary Policy Committee (MPC) of the Reserve Bank of India.
- S&P raised India’s GDP growth for FY26 to 6.5%.
- Expectations increased due to normal monsoon, fall in oil prices, and rural demand.
- MPC also forecasts 6.5% growth, strengthened by rural activities and government investment.
- Retail inflation may remain at 3.7% in FY26, with relief in food and energy prices.
- Geopolitical tensions and uncertainty in global trade remain a threat.
S&P Ups India’s FY26 GDP Forecast: Monsoon and rural economy remain strong
S&P has said that a normal southwest monsoon will support agricultural production, which is expected to boost rural consumption and demand. Apart from this, the emphasis on infrastructure and capex (capital investment) by the government will strengthen economic activities.
Relief in inflation, but core inflation remains a risk
According to the report, retail inflation (CPI) has come down to a 75-month low of 2.82% in May 2025. The MPC has projected inflation at 3.7% for FY26, due to a decline in global energy and food prices. However, a slight increase in core inflation remains a risk.
Global risks and trade confusion
The report cites geopolitical tensions, uncertainty of trade policies, and weather-based risks as the major negative factors. Especially things like US-China trade tensions and delays in the FTA agreement with Britain remain challenges.
S&P Ups India’s FY26 GDP Forecast: India’s performance is the strongest in Asia-Pacific
S&P said in its review of the Asia-Pacific region that large emerging economies like India have largely survived global pressures on the strength of domestic demand. On the other hand, export-dependent countries like China are facing the impact of US tariffs and weak imports.
