look news india
Amidst the uncertainty prevailing in the global economy, geopolitical tensions and a major supply chain crisis, the Indian economy has once again proved its strong foundation and extraordinary resilience. The world’s four top credit rating agencies—Moody’s, S&P Global Ratings, Asian Development Bank (ADB) and Fitch Ratings—have significantly upgraded India’s gross domestic product (GDP) growth rate projections for the current financial year 2026-27. While the dark clouds of recession are looming over Western countries and major European economies, the confidence of global financial institutions in India proves the impact of the country’s domestic consumption, record infrastructure investment and strong policies.
In the latest revision, Moody’s has raised India’s growth rate forecast to 7 per cent from the earlier 6 per cent. Similarly, S&P Global Ratings has jumped from its earlier estimate of 6.6 percent to 7 percent. Manila-based multilateral development bank, Asian Development Bank (ADB) has also revised its previous estimate of 6.6 percent to 7 percent, confirming India’s economic potential. On the other hand, Fitch Ratings has also significantly increased its earlier estimate of 6.4 percent to 6.9 percent. These figures show that India still remains the brightest and most reliable engine of global development for the world.
The explosive GDP growth rate of 7.8 percent that India recorded during the first quarter (April-June) of the current financial year 2026-27 has completely changed the outlook of these global agencies. The Reserve Bank of India (RBI) had also earlier estimated that the country’s average growth rate will remain at a strong level of 7 percent in the current financial year. Now all the independent agencies at the international level also seem to be in complete agreement with this 7 percent target of RBI.
Even during the second quarter of the current financial year i.e. from July to September, all the major economic indicators (High-Frequency Indicators) of the country are showing very encouraging trends. Strong sales of the automobile sector in the domestic market, continuous record growth in monthly collections of Goods and Services Tax (GST), strong growth in Direct Tax collections, record industrial consumption of electricity, increasing demand for petroleum products and strong export data from non-traditional sectors have further strengthened the backbone of the Indian economy. Analyzing all these positive factors, the Economic Research Division of State Bank of India (SBI), the country’s largest commercial bank, has also projected a stable growth rate of 7 percent in the current quarter. Commenting on this, Mio, India-based country director of ADB, said that despite global freight bottlenecks and high commodity prices, the Indian government’s aggressive spending on capital expenditure (Capex) and infrastructure has kept the economy insulated from external shocks.
Parallel to these bright growth figures, the rating agencies have also highlighted a very worrying aspect, and that is the rapid rise in inflation i.e. retail inflation rate. ADB, S&P and Fitch have all warned that retail inflation may cross the psychological level of 5 percent in the current financial year. If compared with the figures of the previous financial year 2025-26, at that time India’s retail inflation rate was recorded in the safe range of less than 3 percent, which maintained the purchasing power of the common consumers.
However, the retail inflation figure has reached 4.84 percent in the month of August, and it is likely to go up further in the coming days. The biggest reason for this inflation is the deepening geopolitical crisis in West Asia (Middle East), due to which the global supply chain of crude oil through the Red Sea and surrounding sea waterways has been seriously disrupted. Crude oil prices in the international market have been continuously trading above the high level of $ 100 per barrel for the last 15 to 20 days. Due to this uncontrolled rise in crude oil, there is huge financial pressure on Indian Oil Marketing Companies (OMCs) to increase the retail prices of petrol and diesel in the domestic market, due to which there is a direct threat of freight transportation becoming expensive and food prices increasing.
In view of the continuously increasing inflation and the price of crude oil which has crossed 100 dollars per barrel, there is a deepening fear in the financial markets that the Reserve Bank of India may adopt its strict monetary policy stance. Rating agencies and financial economists believe that the central bank may resort to increasing the policy bank rates (Repo Rate) to control inflation between October and December 2026.
Economic experts estimate that in the review meeting of the Monetary Policy Committee (MPC) of RBI scheduled in the first week of October, the Governor may announce an interest rate increase of up to 0.25 basis points (25 bps). If the Reserve Bank decides to increase the repo rate, it will have a direct impact on the pockets of common citizens. Commercial banks will immediately increase the interest rates on home loans, car loans and personal loans, due to which the monthly EMI of common families will increase and taking new loans will become expensive. Now the eyes of the country are fixed on the upcoming policy decisions of RBI to see what kind of balance it strikes between maintaining the pace of rapid economic growth and controlling inflation.