Indian Thought Latest News & Views
GDP: The rating agency said that the risks to our basic forecasts remain quite negative. The world’s renowned rating agency S&P on Friday reduced India’s GDP ( GDP) growth forecast for the current financial year (FY2025-26) by 0.2 percent to 6.3 percent. S&P said that India’s gross domestic product (GDP) growth rate will be 6.3 percent in the financial year 2025-26 and 6.5 percent in 2026-27. According to PTI news, it estimates that among the major economies of Asia-Pacific, China’s growth rate is likely to fall by 0.7 percent to 3.5 percent in 2025 and to three percent in 2026.
This is why the estimate was reduced
According to the news, S&P said that the estimate for India has been cut in view of the uncertainty over the US tariff policy and its negative impact on the economy. Expressing concern about the rise of protectionist policies in its report, S&P Global Ratings said that no country becomes a winner in such a scenario. In its previous estimate in March, the rating agency had also said that India’s GDP growth would decline from 6.7 percent to 6.5 percent in the financial year 2025-26.
Risks remain quite negative
The rating agency said that the risks to our basic forecasts remain quite negative. The tariff shock can have a more negative impact on the economy than expected. The long-term structure of the global economy, including the role of the US, is also not fixed. The rating agency has projected the exchange rate of rupee against the US dollar to be Rs 88.00 per dollar by the end of 2025, which was Rs 86.64 per dollar at the end of 2024.
America’s customs policy can be of three types
According to S&P, the US economy is expected to grow by 1.5 percent this year and 1.7 percent next year. The agency believes that America’s customs policy can be of three types. With China, it will be a different matter due to bilateral trade imbalance, unfair competition and geopolitical tensions. Trade relations with the European Union are likely to remain complicated, while Canada may take a tough stand in trade talks with the US. S&P expects that the rest of the countries will try to reach an agreement with the US instead of taking retaliatory measures.
