In the Asia-Pacific regions, the agency has revised up growth forecasts for economies exposed to the AI-led tech export boom, while others are expected to face downward revisions because of the energy stress | Photo Credit: sandsun

S&P Global on Wednesday estimated the Indian economy to grow at 6.6 per cent in the current fiscal, which is 110 basis points lower than the growth number for fiscal year 2025-26. However, it expects retail inflation to jump to over 5 per cent.

Meanwhile, for the Asia-Pacific overall, the agency revised up growth forecasts for economies exposed to the AI-led tech export boom, while others face downward revisions because of the energy stress.

“We project real GDP growth will slow to 6.6 per cent in the fiscal year ending in March 2027, compared with 7.7 per cent in fiscal 2026, amid the energy stress, expectations of a sub-par monsoon, and slowing global growth,” the agency said in its latest quarterly Asia-Pacific economic commentary, with updates to forecasts for economies across the region.

Estimates by S&P Global is at par with RBI. Earlier this month, post the Monetary Policy Committee meeting, RBI Governor Sanjay Malhotra said that real GDP growth for 2026-27 is projected at 6.6 per cent, as against earlier estimates of 6.9 per cent. “Prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook,” he said.

On the issue of inflation, S&P Global said: “We project consumer inflation will rise to 5.1 per cent this fiscal year as manufacturers pass on higher energy costs to consumers, alongside recent increases in administered prices such as for petrol, diesel, and cooking gas.”

It expects a policy rate hike in the second half of this fiscal year. Also, “with the current account deficit on the rise and the rupee weakening, the authorities have taken measures to encourage foreign capital inflows. These measures have strengthened the rupee vis-a-vis the US dollar somewhat,” it said.

Overall Asia-Pacific region

“Surging AI-related demand is fueling an Asian tech export boom, boosting growth in economies such as Taiwan, South Korea and Vietnam, Singapore, mainland China, Malaysia, Thailand and Japan,” the update said, while adding that China’s domestic economy is likely to stay subdued amid weak housing, fiscal restraint and low confidence, even as export prospects remain solid.

It also said that Asia-Pacific economic growth largely held up in early 2026. In the first quarter, GDP growth met or exceeded expectations in most economies, with generally solid contributions from both exports and domestic demand. However, growth significantly lagged expectations in the Philippines, where the energy shock combines with a sharp reduction in public infrastructure spending related to misutilisation of funds.

Growth was also somewhat below expectations in Australia. The energy stress is weighing on the region’s economies. Most rely heavily on West Asia supply. In some economies, economic activity is disrupted by sectoral shortages of refined products or petrochemical inputs and government measures to save energy consumption.

Most regional governments have taken measures to limit the passthrough from higher global energy prices onto fuel products. As a result, in June gasoline prices had risen on average only one-third of the increase in the US. The rise ranged from less than 5 per cent in Australia, Indonesia and Malaysia, to around 25 per cent in the Philippines, Thailand and Vietnam. Still, higher global energy prices filter through to consumers via increases in production costs of other products and services.

Published on June 24, 2026