S&P Global Ratings cut India’s GDP growth to 6.6 per cent in the current fiscal year, driven by energy stress, a sub-par monsoon and slowing global growth.
“We project real GDP growth will slow to 6.6 per cent in the fiscal year ending in March 2027, compared with 7.7 per cent in fiscal 2026, amid the energy stress, expectations of a sub-par monsoon, and slowing global growth,” S&P said in its report.
S&P’s FY27 growth projection aligns with the RBI estimate of 6.6 per cent.
Notably, the Indian economy recorded 7.7 per cent growth in the 2025-26 fiscal and 7.1 per cent in 2024-25.
In its report titled ‘Economic Outlook Asia-Pacific Q3 2026: AI-Exposed Markets To Outperform’, S&P said the region’s outlook is shaped by resilient global activity, energy market stress, and an AI-driven tech export boom.
S&P said consumer inflation would be 0.5-0.6 percentage points higher in the third quarter in India, rising to 5.1 per cent in the current fiscal year as manufacturers pass on higher energy costs to consumers, alongside recent increases in prices of petrol, diesel, and cooking gas.
To deal with the deficient monsoon, the Centre has drawn up state-wise contingency plans recommending alternative crops suited to deficient rainfall conditions. Notably, India imports 88 per cent of its crude oil needs, and a rise in global prices increases its import bill and stokes inflation.
S&P said the impact of energy stress arising from the West Asia conflict is visible, as the industry faces a substantial rise in input costs and suppliers’ delivery time. Also, higher fertiliser prices weigh on food production and raise food prices.
Rising inflation is eroding purchasing power, thus depressing growth. Sharply higher fertiliser prices may weigh on food production and fuel food prices, S&P said.