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title: 'India to grow 6.6% in FY26, driven by investments, easing rates: Ind-Ra'

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# India to grow 6.6% in FY26, driven by investments, easing rates: Ind-Ra
India's economy is projected to grow at 6.6% in FY26, driven by investments and anticipated easing of monetary policy. The growth forecast comes from India Ratings and Research (Ind-Ra), who believe that investments will be a key driver, similar to FY22 and FY24. The agency expects a reversal of the cyclical slowdown witnessed in the past three quarters, starting from the December quarter.

While the economy faced challenges in the previous fiscal year due to the aftereffects of COVID-19 and base effects, the recent slowdown is attributed to weak private sector capex. Ind-Ra anticipates monetary easing, although fiscal and external tightening is expected to persist. The agency also forecasts retail inflation to average 4.4% in FY26 and a merchandise trade deficit of $308 billion. However, the growth and inflation projections could be impacted by factors such as tariff wars and capital outflows due to a stronger dollar.

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