Tale of two GDP estimates: S&P cuts, Finmin steadfast

S&P cuts India GDP growth forecast for FY26 and FY27, finance ministry optimistic on FY25

- Rhik Kundu

S&P Global Ratings on Monday lowered its growth projections for the Indian economy for the next two fiscal years, citing the impact of potentially high interest rates and reduced fiscal stimulus, as well as post-election "changes in the US macro picture".

This is in contrast to the finance ministry, which in its October Economic Review, projected a more optimistic picture, saying high-frequency indicators showed a rebound in economic activity in October after a brief lull over the monsoon months.

The ministry expects economic growth to stabilize at 6.5-7% in FY25, moderating from 8.2% in FY24.

"These include indicators of rural and urban demand and supply-side variables like Purchasing Managers' Index and E-way bill generation. On the employment front, the formal workforce is expanding, with notable increases in manufacturing jobs and a strong inflow of youth into organised sectors," it said in the report released on Monday.