New Delhi: S&P Global has raised India's Gross Domestic Product (GDP) growth predictions for 2025 and 2026, attributing strong internal demand as a critical factor.
In its most recent research note, the company now expects India's GDP to expand by 6.5% year-on-year in 2025 and 6.7% in 2026, an increase of 0.2 percentage points over its earlier estimates for both years.
However, the note states that the forecast is based on the assumptions of a normal monsoon, cheaper crude oil prices, income tax concessions, and monetary relaxation.
The report also reveals that, despite recent increases in core inflation in India and other South Asian countries such as Indonesia and Malaysia, overall inflation has decreased.
Additionally, in India, decreasing food inflation helps to rein in overall inflation. According to the study, redirection of supplies outside the US will have an impact on rate increases.
According to the study, strong local demand is preventing the Asia-Pacific area from slowing.
S&P Global anticipates China's GDP growth of 4.3% in 2025 and 4.0% in 2026, with strong domestic demand helping to mitigate the impact of US tariffs on China's exports.
In the other Asia Pacific region, South Korea's GDP contracted sequentially in the first quarter to a level lower than the previous year, owing to weak domestic demand and political uncertainty.
Japan's economy shrank, while Australia's growth stayed modest. S&P Global stated that increased uncertainty, sluggish income growth, and rising living cost pressures have reduced household demand in these nations.
