S&P Global has revised its GDP growth forecasts for India upward, citing strong domestic demand as a key factor driving economic resilience.
In its latest report, the agency now projects India's economy to expand by 6.5% in 2025 and 6.7% in 2026, marking an increase of 0.2 percentage points from its previous estimates for both years.
The forecast is based on several favorable conditions, including normal monsoon patterns, moderate crude oil prices, income-tax relief measures, and a looser monetary policy stance.
S&P Global noted that while headline inflation in India has generally eased, core inflation has shown a slight uptick in recent months—a trend also observed in countries like Indonesia and Malaysia. Declining food inflation in India has played a role in keeping overall inflation in check.
The report also highlights that robust domestic demand is helping to cushion the broader Asia-Pacific region from a more pronounced economic slowdown. However, the redirection of exports away from the U.S., particularly by China, may dampen price pressures across the region.
For China, S&P expects GDP growth to moderate to 4.3% in 2025 and 4.0% in 2026, as U.S. trade tariffs weigh on exports.
Elsewhere in Asia-Pacific, South Korea’s GDP contracted in the first quarter, falling below year-ago levels amid weak domestic demand and political uncertainty. Japan also saw a slight economic contraction, while Australia's growth remained subdued.
"Heightened uncertainty, stagnant income growth, and the rising cost of living are putting pressure on domestic demand in several developed economies," the report said. (Source: The Tribune)
