Fitch Cuts India’s FY25 GDP Growth Forecast to 6.4%, Cites Slowing Consumption

Fitch Ratings has revised India’s GDP growth forecast for FY25 downward to 6.4% from its earlier estimate of 7.0%, aligning with similar cuts by other institutions, including the RBI and SBI. The downgrade follows weaker-than-expected economic performance, with GDP growth slowing to 5.4% in Q2 FY25, the slowest in seven quarters, attributed to reduced urban middle-class consumption.

Despite the slowdown, Fitch highlighted India’s resilience, noting that its economic growth remains strong compared to global peers. The agency attributed optimism to robust domestic demand, ongoing infrastructure investments, and business reforms.

India’s GDP grew by 8.2% in FY24, maintaining its status as the fastest-growing major economy. However, slower growth in recent quarters poses challenges for job creation and economic momentum. Fitch remains optimistic about long-term recovery, projecting GDP growth of 6.5% in FY26.