Highlighting favourable policy environment augur well for India's economic outlook, BMI, a Fitch Group company, in its latest report has revised upwards India’s Gross Domestic Product (GDP) growth forecast for fiscal year 2025-26 (FY26) to 7.4 per cent, up from 7.2 per cent projected earlier. It also projected GDP to rise by 7 per cent in FY27, up from 6.6 per cent estimated previously. It noted that monetary and regulatory measures should stimulate investment and consumption over 2026-27 fiscal. It said a strong advanced estimate of the current fiscal year's GDP, and rising US-bound merchandise exports during the past two months bode well for India's economic outlook.
It said foundation has already been laid for a strong October-December quarter, and added that the economy would expand by more than 9 per cent Y-o-Y in the third quarter (October-December) of FY 2025-26. It said the 2025 reforms to the goods and services tax and personal income tax systems have lowered the tax burden on households. The Reserve Bank of India also cut its policy rate by a total of 125 basis points last year. Finally, the government has pushed to implement new labour codes and allow 100 per cent foreign ownership of local insurers. It noted that the risks to its outlook are balanced, and stem from whether a future India-US trade deal that meaningfully lowers tariffs on US bound exports occurs.
Recently, the National Statistics Office (NSO) projected a 7.4 per cent GDP expansion for FY2025/26 (April-March). This implies the government expects GDP will grow by around 7 per cent Y-o-Y on average in the second half of the fiscal year. Meanwhile, the Indian economy grew at 6.5 per cent in 2024-25 fiscal. Moreover, the government data showed that the Indian economy grew by a robust 7.8 per cent in the first quarter (April-June), and 8.2 per cent in the second quarter (July-September).
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