Fitch, a global rating agency, has increased India's GDP forecast for FY26 to 6.9% from 6.5%, pointing to strong domestic demand as the primary factor for growth. The agency emphasized that robust real income trends are reinforcing consumer spending, and more lenient financial conditions are anticipated to encourage investment. Fitch observed that yearly growth will slow down in H2FY26, declining to 6.3% in FY27 and further to 6.2% in FY28 as the economy functions just above its potential. The speed of economic activity surged notably from Q1 to Q2 of 2025, with real GDP growth climbing to 7.8% YoY, propelled by enhanced growth in the service sector at 9.3% YoY and increased consumption expenditures, both private and public. Fitch anticipates that global GDP growth will slow to 2.4% in 2025, a decrease from 2.9% the previous year, yet slightly above the June 2025 prediction. Growth forecasts for China were adjusted upward to 4.7% from 4.2%, for the Eurozone to 1.1% from 0.8%, and for the United States (US) to 1.6% from 1.5%. Fitch noted that US tariffs on India are expected to be reduced through negotiations, yet uncertainties regarding trade relations might hinder investment confidence. Domestic reforms, such as Goods and Services Tax (GST) adjustments set to take effect on September 22, 2025, are anticipated to moderately increase consumer expenditure. Inflation is predicted to increase to 3.2% by the conclusion of 2025 and 4.1% by the close of 2026, while the Reserve Bank of India (RBI) is anticipated to reduce policy rates by 25 basis points later this year, keeping them steady until the end of 2026, with a possible rate hike in 2027