{"id":76069,"date":"2024-06-19T01:23:06","date_gmt":"2024-06-19T01:23:06","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/06\/19\/fitch-raises-indias-growth-forecast-to-7-2-times-of-india\/"},"modified":"2024-06-19T01:23:06","modified_gmt":"2024-06-19T01:23:06","slug":"fitch-raises-indias-growth-forecast-to-7-2-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/06\/19\/fitch-raises-indias-growth-forecast-to-7-2-times-of-india\/","title":{"rendered":"Fitch raises India’s growth forecast to 7.2% – Times of India"},"content":{"rendered":"
\"Fitch<\/div>\n
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<\/div>\n