New Delhi, May 29
Crisil on Thursday forecast India’s gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, adding that improving domestic consumption is likely to support industrial activity.
“We expect domestic consumption demand to improve driven by healthy agricultural growth, easing inflation supporting discretionary spend, rate cuts by the Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) and income tax relief this fiscal,” the global ratings agency said in a note.
The India Meteorological Department expects an above-normal monsoon this fiscal (106 per cent of long-period average), which bodes well for agricultural production and inflation.
Furthermore, according to Crisil Intelligence, crude oil prices are expected to remain subdued this fiscal, averaging $65-$70 per barrel compared with an average of $78.8 per barrel in the prevoius fiscal.
“We expect the MPC to cut the repo rate by another 50 basis points (bps) this fiscal, after 50 bps cuts until April. Bank lending rates have begun easing, which should support domestic demand,” according to the note.
Overall, Crisil forecasts gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, with external headwinds posing downside risks.