India's FY26 GDP growth forecast cut to 6.3% from 6.5%: S&P Global

The rating agency projected India's growth at 6.5 per cent for FY27. In March, it had lowered the FY26 GDP growth forecast to 6.5 per cent from 6.7 per cent.

It projected Indian rupee-US dollar exchange rate to be 88 by 2025-end from 86.64 in 2024.

In its report titled ‘Global Macro Update: Seismic Shift in US Trade Policy Will Slow World Growth’, the agency said "we reiterate that there are no winners in a scenario of escalating protectionist policies."

Among the major Asia-Pacific economies, it expects China to see its growth drop by 0.7 pp in 2025 to 3.5 per cent and in 2026 to 3 per cent from 4.1 per cent and 3.8 per cent respectively in the March baseline.

In response to US tariffs of more than 100 per cent, it expects a sharp decline in China's exports to the United States. With exports to other countries also affected amid declining real world trade growth, it now expects overall export declines in China of more than 5 per cent in 2025 and more than 6 per cent in 2026.

S&P Global moderately revised down China's domestic demand growth, as it anticipates policy support to offset a sizable portion of the spillover impact from the export plunge on investment and consumption. It expects China’s imports to decline significantly. Still, it projects imports to fall less than exports.

For the rest of Asia-Pacific, it views the external environment as worse than in the March forecast, with higher direct US tariffs and weaker demand from China and elsewhere.

ALCHEMPro News Desk (DS)