Categories: Business

Fitch raises India’s growth forecast to 7.2%

NEW DELHI: Fitch Ratings on Tuesday raised India’s growth forecast for the current fiscal to 7.2%, from 7% projected in March, saying elevated consumer confidence will drive spending, besides increased investments.
In June update to its global economic outlook report, Fitch said it expects inflation to decline to 4.5% by end of this year and RBI to cut policy interest rates by 25 basis points to 6.25%.“We expect the Indian economy to expand by a strong 7.2% in FY24/25 (an upward revision of 0.2pp from the March GEO),” Fitch said in its global economic outlook report.
Investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence, it said. For the fiscal years 2025-26 and 2026-27, Fitch projected growth rates of 6.5% and 6.2%, respectively.
Fitch’s estimates for FY25 are in line with that of RBI which earlier this month projected Indian economy to expand 7.2% in the current fiscal on the back of improving rural demand and moderating inflation. While the Asian Development Bank (ADB) estimates growth at 7%, S&P Global Ratings and Morgan Stanley project growth rate of 6.8%.
Moody’s Ratings and Deloitte India estimates India’s GDP to grow at 6.6% in 2024-25 fiscal. The Indian economy grew 8.2% in the last fiscal (2023-24), with a 7.8% expansion in March quarter. Fitch said purchasing managers survey data point to continued growth at the start of the current financial year.
It said signs of the coming monsoon season being more normal should support growth and make inflation less volatile, though a recent heatwave poses a risk. “We expect growth in later years to slow and approach our medium-term trend estimate,” it said, adding growth will be driven by consumer spending and investment.
Consumer price inflation has only edged down since the start of the calendar year, with annual inflation at 4.7% in May from 5.7% in December 2023.
According to official forecasts, rainfall during June-September is likely to be above average, Fitch said, adding this should limit the inflationary risks from food price spikes.
“We expect headline inflation to continue declining to 4.5% by calendar year-end, and average 4.3% in 2025 and 2026, staying slightly above the midpoint of its target range (4%+/- 2%),” Fitch said. As per government data, retail inflation in May eased to 1-year low of 4.8%. agencies
AD
News Today

Recent Posts

Kareena Kapoor’s Next Untitled Film With Meghna Gulzar Gets Prithviraj Sukumaran On Board

Kareena Kapoor is working with Raazi director Meghna Gulzar for her next film. The project,…

2 weeks ago

Purdue basketball freshman Daniel Jacobsen injured vs Northern Kentucky

2024-11-09 15:00:03 WEST LAFAYETTE -- Daniel Jacobsen's second game in Purdue basketball's starting lineup lasted…

2 weeks ago

Rashida Jones honors dad Quincy Jones with heartfelt tribute: ‘He was love’

2024-11-09 14:50:03 Rashida Jones is remembering her late father, famed music producer Quincy Jones, in…

2 weeks ago

Nosferatu Screening at Apollo Theatre Shows Student Interest in Experimental Cinema – The Oberlin Review

2024-11-09 14:40:03 A silent German expressionist film about vampires accompanied by Radiohead’s music — what…

2 weeks ago

What Are Adaptogens? Find Out How These 3 Herbs May Help You Tackle Stress Head-On

Let's face it - life can be downright stressful! With everything moving at breakneck speed,…

2 weeks ago

The new Mac Mini takes a small step towards upgradeable storage

Apple’s redesigned Mac Mini M4 has ditched the previous M2 machine’s SSD that was soldered…

2 weeks ago