S&P Global Ratings on Tuesday reduced India’s GDP development estimates (growth rate) to 6.5 percent for FY 2026. Earlier this estimate was made 6.7 percent. S&P global ratings hopes that the Asia-Pacific sector economies will feel pressure on growing American tariffs and globalization. According to PTI news, in its economic perspective for the Asia-Pacific (APAC), S&P said that despite these external pressures, it hopes that the pace of domestic demand in most emerging-market economies will remain strong.
The upcoming monsoon season will be normal
According to the news, S&P Global said that we hope that India’s GDP will increase by 6.5 percent in the financial year ending March 31, 2026. Our forecast is the same as the result of the previous financial year, but is less than our earlier 6.7 percent forecast. The forecast believes that the upcoming monsoon season will be normal and commodity- especially crude oil prices will be soft. S&P said that the reduction in food inflation, tax benefits announced in the country’s budget for the financial year ending March 2026, and low borrowing costs will promote discretionary consumption in India.
Expected to cut benchmark interest rates
The Global Credit Rating Agency hopes that the central bank of the Asia Pacific region will continue to cut benchmark interest rates this year. The rating agency also says that we estimate that the Reserve Bank of India will cut interest rates in the current cycle of 75 BP-100 BP. Last month, the Reserve Bank of India (RBI), in its monetary policy review, has reduced the repo rate from 25 basis points to 6.50 percent to 6. 25 percent. Due to a decrease in food inflation and a decrease in crude oil prices, the headline inflation will reach the target of 4 percent of the central bank in the financial year ending March 2026 and the fiscal policy will be controlled.
Will feel the pressure of American tariff
S&P stated that Asia-Pacific economies would feel pressure on especially growing American tariffs and globalization in general. So far, the new US government has imposed an additional 20 percent duty on imports from China; Some imports from Canada and Mexico have imposed 25 percent duty, while other products have been postponed for one month; And steel and aluminum have been charged a 25 percent fee globally. S&P said the economic policy is changing in the major areas of Donald Trump administration in the US.
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