S&P retains India's FY25 growth forecast at 6.8%, expects rate cut in Oct

S&P Global has retained India’s GDP growth forecast at 6.8% for FY25, citing high interest rates and lower fiscal boost tempering demand in non-agricultural sectors. The rating agency expects the Reserve Bank of India (RBI) to start cutting interest rates in its October monetary policy review, with two rate cuts anticipated this financial year. S&P also projects India’s GDP growth at 6.9% for FY26, driven by solid economic fundamentals. The agency expects inflation to average 4.5% in the current financial year, aligning with the RBI’s target. The RBI has maintained the benchmark interest rate at 6.5% since February 2023 to control inflation. S&P’s outlook reflects optimism about India’s economic resilience despite global uncertainties, with the expectation that rate cuts will support growth by easing borrowing costs and stimulating demand.