S&P Global Maintains India's GDP Growth at 6.5%, Foresees RBI Rate Cut

S&P Global Ratings announced on Tuesday that they are maintaining India's GDP growth forecast at 6.5% for the fiscal year, buoyed by strong domestic demand and favorable monsoon conditions. The financial services company highlighted the potential for domestic growth amid external economic challenges.

The agency anticipates a downward revision in inflation to 3.2% for the fiscal year, paving the way for a potential 25 basis points rate cut by the Reserve Bank of India. S&P noted that reduced food inflation is contributing to the lower inflation expectations, offering further scope for monetary policy adjustments.

S&P's regional economic outlook for Asia-Pacific suggests that despite stronger external economic headwinds such as rising US tariffs, robust domestic demand in the region is set to cushion the impact. India's economic performance, however, has been more adversely affected compared to some other Asian economies.

(With inputs from agencies.)