Indian economy to grow at 6.6% in FY26: Ind-Ra
Indian economy is to grow at 6.6% in 2025-26, up from 6.4% in the current fiscal year, India Ratings and Research (Ind-Ra) projected on Wednesday.
The Asian Development Bank (ADB), citing robust expansion in the industrial sector and strong demand in construction led by housing, kept India’s gross domestic product (GDP) growth projection for FY25 unchanged at 7 per cent.
“The stronger-than-expected fiscal position of the central government could provide a further boost to growth. However, this must be weighed against downside risks arising from weather events and geopolitical shocks,” said ADB’s July outlook.
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It said that the bank credit is fueling robust housing demand and improving private investment demand. However, export growth will continue to be led by services, with merchandise exports showing relatively weaker growth.
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The ADB said India’s agriculture sector, which is expected to rebound with forecasts for an above-normal monsoon, will be important to sustain economic growth in rural areas. It said that investment demand led by public investment remains strong.
It said that the forward-looking services purchasing managers’ index is well above its long-term average.
As stated in its April outlook, ADB maintained India’s GDP growth projection at 7.2 per cent.
ADB slightly raised its growth forecast for developing Asia and the Pacific for 2024 to 5 per cent from a previous projection of 4.9 per cent, as rising regional exports complement resilient domestic demand.
The growth outlook for 2025 is maintained at 4.9 per cent.
Notably, the International Monetary Fund (IMF) has also raised India’s growth projection for FY25 by 20 basis points to 7 per cent citing ‘improved prospects’ for private consumption, particularly in rural areas.
The UN body expects gross domestic product (GDP) growth in FY26 to slow down to 6.5 per cent, same as projected in its April World Economic Outlook (WEO).
“The forecast for growth in India has also been revised upward, to 7 per cent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas,” it said in an update to the WEO.
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