S&P Global Ratings on Monday lowered India’s growth rate (GDP rate) forecast for fiscal 2026 and fiscal 2027. According to the rating agency, higher interest rates and lower fiscal impulses are impacting urban demand. In an update to its economic forecast for Asia-Pacific economies following the US election results, the ratings agency projected growth of 6.7 percent in the 2025-26 financial year (April 2025 to March 2026) and 6.6 percent in the next financial year. , reported PTI. A GDP growth rate of 8 percent is estimated. This is down from previous estimates of 6.9 percent and 7 percent respectively.
Find out the latest estimates for fiscal year 2025
For fiscal year 2025, S&P Global has pegged the GDP growth rate at 6.8 percent. The agency said that in India we see GDP growth of 6.8 per cent in this financial year. While the Purchasing Managers’ Index (PMI) remains reassuringly in expansion territory, other high-frequency indicators suggest some temporary moderation in growth momentum due to the damage suffered by the construction sector in the September quarter. However, the agency believes that India’s GDP will grow at a rate of 7 percent in fiscal 2028.
This forecast was made for China.
S&P Global Ratings kept China’s growth forecast at 4.8 percent through 2024, but cut its forecast for next year to 4.1 percent from 4.3 percent previously and to 3.8 percent in 2026 from previous estimate of 4.5 percent. The impending change in the US administration will be a challenge for China and the rest of the Asia-Pacific. The report titled ‘Asia-Pacific Economic Outlook Q1 2025: US trade shift blurs the horizon’ said US tariff increases have become more likely, particularly in China, and possible changes in the US macro outlook, leading to different expectations on interest rates. “
Central banks will remain cautious
Louis Kooij, chief economist at S&P Global Ratings Asia-Pacific, said rising risks are clouding Asia-Pacific’s economic outlook in the first quarter of 2025. Most of the sector should be able to continue growing solidly. Central banks will likely remain cautious and not lower their interest rates too quickly. China’s stimulus measures should support growth, but S&P expects its economy to be hit by US trade tariffs on its exports.
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