May 23, 2025 — Global credit rating agency Fitch Ratings has revised its medium-term GDP growth projections, raising India’s potential growth to 6.4% while lowering China’s forecast to 4.3%.
Fitch attributes India’s upward revision to a significant increase in labor force participation, which has bolstered total employment. However, the agency notes that total factor productivity (TFP) growth is expected to moderate to its long-term average of 1.5%.
Conversely, China’s downgraded projection reflects ongoing challenges in its property market and a declining labor force. These factors contribute to a more subdued economic outlook for the country.
These adjustments are part of Fitch’s broader assessment of potential GDP growth for ten emerging market economies over the next five years. The revised estimates underscore shifting economic dynamics, with India poised for stronger growth relative to China.
Fitch projects India’s economy to grow at 6.4% in 2025, 6.3% in 2026, and again 6.4% in 2027, indicating a stable growth trajectory.
In contrast, China’s economic outlook has been dampened by persistent challenges in its real estate sector and a shrinking labor force. These factors have led to a more subdued growth projection of 4.3% over the medium term.
These contrasting shifts underline India’s rising position as a key growth engine among emerging markets, even as policy and mobility frameworks in Europe tighten.
