New Delhi: In a shot in the arm for the government, Fitch Ratings has raised its forecast for India’s growth. At a time when the developed countries are facing difficulties t maintain their economic growth, the global ratings agency projected the Indian economy to expand 6.9% in FY26; earlier it was up estimated to grow at 6.5 percent.

The Fitch Ratings’ data comes after Indian economy showcased stronger-than-expected performance in the second quarter of 2025. The Union Ministry of Statistics & Programme Implementation recently stated that India’s Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate of 6.5% during Q1 of FY 2024-25. The ministry said the buoyant growth in Services Sector has led Indian economy registering Real GVA growth of 7.6% in Q1 of FY 2025-26.

“On the back of the 2Q25 outturn, Fitch has revised up its forecast for the fiscal year ending March 2026 (FY26) to 6.9% from 6.5% in the June GEO. Domestic demand will be the key driver of growth, as strong real income dynamics support consumer spending and looser financial conditions should feed through to investment. At the same time, annual growth will slow in the second half of the financial year, and so we expect growth to slow in FY27 to 6.3%. With the economy operating slightly above its potential, we expect growth will edge down to 6.2% in FY28,” the Firch report stated.