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India's Economy Surges: 7.4% Growth Forecasted
12 Jan
Summary
- India's economic outlook is positive with a 7.4% growth forecast.
- Monetary and policy measures will stimulate investment and consumption.
- Recent reforms and tax adjustments are positively impacting households.
BMI, a Fitch Group company, has projected a strong 7.4% economic growth for India in the current fiscal year, with an expected 7% growth in FY27. This optimistic outlook is underpinned by a favorable policy environment, which is anticipated to stimulate both investment and consumption throughout 2026-27. The National Statistics Office has already projected a 7.4% GDP expansion for FY2025-26, indicating sustained momentum.
The economic performance in the first two quarters of FY2025-26 was robust, with growth rates of 7.8% and 8.2% respectively. BMI anticipates an expansion exceeding 9% in the third quarter (October-December) of FY2025-26, suggesting a very strong performance for that period. The firm has revised its GDP forecast upwards for 2025-26 to 7.4%, from 7.2% previously, and for 2026-27 to 7%, from 6.6%.
Several recent policy changes and reforms are contributing to this positive outlook. These include adjustments to the goods and services tax and personal income tax systems, which have lowered the tax burden on households. Additionally, the Reserve Bank of India's rate cuts and the government's push for new labor codes and increased foreign ownership in the insurance sector are expected to further bolster economic activity.
