Synopsis : S&P Global Ratings has raised India’s GDP growth projection for FY26 to 6.5%, citing resilient domestic demand, easing policies, and lower oil prices. This optimistic revision comes just weeks after a downgrade due to escalating global geopolitical tensions.
S&P Revises India’s FY26 Growth Outlook to 6.5%
New Delhi, June 18 – In a notable turnaround, S&P Global Ratings has upgraded India’s FY26 GDP growth forecast to 6.5%, reversing its previous downgrade in May. The improvement is credited to expectations of a normal monsoon, softening crude oil prices, domestic demand resilience, and monetary easing.
The revision aligns with the Reserve Bank of India’s (RBI) projection, reinforcing the central bank’s outlook on India’s growth trajectory despite global economic uncertainties.
“India’s internal economic momentum remains strong and is supported by a stable policy environment and consumption-led growth,” S&P noted in its Asia-Pacific Economic Outlook.
Key Drivers Behind the Upgrade
Normal monsoon expectations
Lower crude oil prices
Income-tax concessions
Supportive monetary policy
Robust domestic demand
Global Headwinds Still Persist
While S&P remains bullish on India, the report cautioned that global risks—particularly escalating Middle East conflicts and volatile oil markets—pose potential threats.
The conflict between Israel and Iran, now extending into its twelfth day, could disrupt oil supply and trigger price spikes, hurting economies like India that import over 90% of their crude oil.
“The region remains vulnerable to shocks stemming from rising geopolitical tensions,” the agency added.
Global Trade Concerns Linger
In addition to oil risks, S&P flagged concerns over rising US tariffs and their potential to disrupt global trade and investment. These policy moves could weigh heavily on emerging economies by dampening global growth prospects.
From Downgrade to Upgrade: A Quick Turnaround
Last month, S&P had cut India’s forecast to 6.3%, citing risks from tariff wars and global demand weakness. The new 6.5% estimate indicates restored confidence in India’s internal economic resilience, even as global headwinds intensify.
Disclaimer : This article is for informational purposes only and does not constitute financial or investment advice. Readers should consult a licensed professional before making any financial decisions.
