New Delhi [India], September 23 : S&P Global has increased India’s GDP projection for the current fiscal to 7 per cent from 6.6 per cent citing strong consumption and industrial activity, however, it flagged growth may moderate in H2.
It noted in its report, India’s economic growth exceeded expectations in the June quarter, supported by robust industrial activity, healthy consumption, strong goods exports and accelerating government investment.
“We have consequently upgraded our GDP growth forecast for the current fiscal year, ending March 31, 2027, to 7.0%, from 6.6% previously,” it said. 
However, growth is expected to “ease” in the second half of the fiscal year as the benefits from GST rationalisation and income tax cuts fade. 
The report also flagged weather as a key risk, noting that “Cumulative rains were 15% below normal till Sept. 9, 2026, in the current monsoon season.”
“Agricultural output and food inflation therefore remain key variables to watch,” it said. 
S&P Global also expects some monetary policy tightening as higher energy prices push inflation upward. For India, it said inflation remains within the target range but is “moving higher because of energy and food price pressures.”
“Higher oil prices are likely to push up inflation modestly. Food prices could also rise more due to El Niño. However, preparedness measures will prevent acute supply crunches and limit the macro impact,” it added. 
It also noted that depreciation pressures on Asia-Pacific currencies eased in the third quarter after significant weakness in the first half of 2026. However, the currencies of India, Indonesia, the
Philippines and Thailand had depreciated by more than 5 per cent through mid-September.
The report noted that several Asia-Pacific central banks have raised policy rates in 2026, but rates in the region remain below US levels, leaving economies vulnerable to capital outflows as US interest rates rise.
“We anticipate some central banks will further increase policy rates this year to contain inflation and support exchange rates,” it said, adding,“We see 25 bps increases in the rest of 2026 in Australia, India, the Philippines, South Korea, and Taiwan.” 
Higher inflation driven by elevated oil prices and greater currency pressure from rising US interest rates remain key risks and could lead to larger rate hikes, the report added.