New Delhi, June 24
India is likely to see a GDP growth of 6.5 per cent in current fiscal (FY26) due to robust domestic demand, a normal monsoon and monetary easing, a report by S&P Global Ratings said on Tuesday.
Domestic demand resilience is particularly relevant in limiting the economic slowdown in economies less exposed to goods exports such as India.
“We see India's GDP growth holding up at 6.5 per cent in fiscal 2026 (year ending March 31, 2026). That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” said the report covering Asia-Pacific economies.
In India, falling food inflation also helps contain headline inflation.
The country’s annual rate of inflation based on the Wholesale Price Index (WPI) eased further to a 14-month low of 0.39 per cent in May from 0.85 per cent in April and 2.05 per cent in March.
Meanwhile, the country’s inflation rate based on the Consumer Price Index (CPI) has declined to 2.82 per cent in May this year compared to the same month of the previous year. This is the lowest level of retail inflation since February 2019, figures released last week showed.
Food Inflation declined to 0.99 per cent during May, which is the lowest since October 2021. This is the seventh month in a row that food inflation has registered a decline as the agricultural output has been on the rise.