Fitch raises FY25 growth forecast to 7.2% from 7%

Global ratings agency Fitch expects the Indian economy to expand by 7.2% in FY25, slightly higher than the earlier estimate of 7%. It also sees investments continuing to rise but slower than in recent quarters and consumer spending recovering with elevated consumer confidence. “Purchasing managers survey data point to continued growth at the start of the current financial year.
Signs of the coming monsoon season being more normal should support growth and make inflation less volatile, though a recent heatwave poses a risk,” Fitch said in its latest Global Economic Outlook (GEO) report.
The agency said it expects growth in later years to slow and approach its medium term trend estimate. “We forecast real GDP growth of 6.5% in FY26 (unchanged from March), and 6.2% in FY27, driven by consumer spending and investment,” according to the agency.
Several agencies have raised their growth forecasts sharply after official data showed the economy grew at better than expected 8.2% in 2023-24, powered by robust 7.8% expansion in the April-Jan quarter.
The agency said that above normal monsoon rainfall should limit the inflationary risks from food price spikes. It expects headline inflation to continue declining to 4.5% by calendar year-end, and average 4.3% in 2025 and 2026, staying slightly above the midpoint of its target range (4% +/-2%).