Aspirant Academy
ENHI

RAS question

Consider the following statements about S&P Global's GDP forecast for India released on March 25, 2026: 1. S&P Global raised India's FY2026-27 GDP growth forecast to 7.1%. 2. India's FY2025-26 growth was revised downward to 6.8%. 3. S&P flagged the Strait of Hormuz crisis as a key downside risk for India. Which of the statements given above is/are correct?

Correct answer: (C) 1 and 3 only.

S&P Global's March 25, 2026 India forecast made statements 1 and 3 correct: it raised FY2026-27 GDP growth to 7.1% and flagged the Strait of Hormuz crisis as a downside risk, while FY2025-26 growth was revised upward to 7.6%, not downward to 6.8%.

  1. (A)

    1 and 2 only

  2. (B)

    2 and 3 only

  3. (C)

    1 and 3 only

  4. (D)

    1, 2 and 3

Explanation

The answer is 1 and 3 only. S&P Global Ratings raised India's FY2026-27 GDP growth forecast to 7.1%, so statement 1 is right. The trap is statement 2: FY2025-26 growth was not cut to 6.8%; it was revised upward by 0.4 percentage points to 7.6%. Statement 3 is also right because the cited downside risk is the Strait of Hormuz crisis, triggered by US-Israel strikes on Iran on February 28, 2026. The risk channel matters for India because higher crude oil prices could widen the trade deficit, with India importing 26 lakh barrels per day through the strait. The forecast and the external-sector risk therefore move in opposite directions: stronger growth estimates, but sharper oil-price vulnerability.

Why the other options are wrong

  • (A) Option A wrongly includes statement 2, because FY2025-26 growth was revised upward to 7.6%, and it also leaves out the correct Strait of Hormuz downside-risk statement.
  • (B) Option B omits statement 1 even though S&P Global raised the FY2026-27 growth forecast to 7.1%, and it includes the false claim that FY2025-26 growth was revised downward to 6.8%.
  • (D) Option D treats all three statements as correct, but statement 2 fails because the FY2025-26 estimate moved up to 7.6%, not down to 6.8%.

Concept

This tests current Indian economy through growth-forecast revisions and external-sector risk transmission. It recurs in RAS because such questions check whether candidates can separate the headline GDP number from the oil-price and trade-deficit risk channel.

Source

Related questions