S&P Raises India GDP Forecast
Analysis based on 6 articles · First reported Mar 25, 2026 · Last updated Mar 25, 2026
S&P Global Ratings' upgraded growth forecast for India is positive for the market, indicating strong economic drivers. However, the warnings about the Middle East conflict's impact on energy prices and potential interest rate hikes by the State Bank of India introduce uncertainty and could lead to increased volatility in Indian markets.
S&P Global Ratings has raised India's GDP growth forecast for fiscal year 2027 to 7.1% and for fiscal year 2028 to 7.2%, citing resilient private consumption, a modest recovery in private investment, and solid exports as key drivers. The agency also revised upwards the 2025-26 growth to 7.6%. However, S&P Global Ratings cautioned that the ongoing Middle East conflict poses significant downside risks to this outlook. Higher energy prices resulting from the conflict could strain India's fiscal position due to increased spending on subsidies and potentially widen the trade deficit. In a severe scenario of prolonged energy market disruption, S&P Global Ratings expects the State Bank of India to tighten monetary policy with a 25 bps rate hike in the second half. The report also projects inflation to rise to 4.3% in fiscal 2027. Other Asia-Pacific economies like Indonesia, Japan, Malaysia, and Thailand are also expected to be affected by higher energy costs. Goldman Sachs offered a contrasting view, paring its growth estimate for India for 2026 and forecasting a 50 basis points hike in policy rates.
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