Despite the ongoing conflict between Iran-US and Israel, Fitch Ratings in its Global Economic Outlook- March 2026 has raised India’s Gross Domestic Product (GDP) growth forecast marginally to 7.5 per cent for current fiscal year 2025-26 (FY26) from 7.4 per cent projected earlier in December 2025. The upward revision in growth estimation attributed to domestic demand, which will be the biggest growth driver this year, with consumer spending and investment rising by (an estimated) 8.6 per cent and 6.9 per cent in the current fiscal year.

Similarly, the ratings agency has revised upwards its growth estimate for FY27 to 6.7 per cent, from 6.4 per cent projected in December 2025. It further projected world GDP growth at 2.6 per cent in 2026 on the assumption that the Iran war does not result in a larger or an enduring spike in energy prices that pushes the annual 2026 oil price forecast above $70/barrel. But it noted that a scenario where oil prices rise to $100 and stay there would be a significant adverse global supply shock.

With regard to India, Fitch said there are tentative signs that real activity is slowing in January and February, but the economy remains resilient, and credit growth is still in double digits. It expects growth to slow in first half of FY 2026-27; with rising inflation constraining real incomes and limiting consumer spending growth. Meanwhile, India’s GDP growth slowed in the December quarter to 7.8 per cent YoY from 8.4 per cent in September quarter.