Fitch Ratings, a leading global ratings agency, has revised India’s GDP growth forecast for the fiscal year 2024-2025 (FY25) to 7 percent, up from the previous estimate of 6.5 percent. This upward revision reflects Fitch’s confidence in India’s continued robust economic expansion amid global uncertainties.
The ratings agency anticipates a 50 basis points rate cut by the Reserve Bank of India (RBI) between July and December, coupled with a gradual decline in India’s Consumer Price Index (CPI) inflation to 4 percent by the end of 2024.
“Fitch’s outlook for emerging markets (excluding China) has notably improved, particularly in India. We now project a growth rate of 7.8 percent for the fiscal year ending March 2024 (FY24) and 7 percent in FY25, reflecting significant upward revisions,” stated Fitch.
While India’s economic growth exceeded 8 percent for three consecutive quarters, Fitch expects a moderation in growth momentum in the final quarter of the current fiscal year, leading to an estimated growth rate of 7.8 percent for FY23-24.
In contrast, Fitch revised China’s growth forecast for 2024 to 4.5 percent from 4.6 percent, citing concerns over the property sector and emerging deflationary pressures. Despite this, fiscal support measures by Chinese authorities have cushioned the impact on the forecast.
Earlier, Moody’s Investors Service raised India’s GDP growth estimate for 2024 to 6.8 percent from 6.1 percent, signaling growing optimism about India’s economic trajectory.
India’s economy demonstrated resilience by registering better-than-expected growth of 8.4 percent in the final quarter of 2023, marking the fastest pace in one-and-a-half years. This robust performance underscores Prime Minister Narendra Modi’s track record of achieving strong economic growth, bolstering confidence ahead of general elections.
The recent growth momentum, with a growth rate higher than the previous three years, has propelled the estimate for the current fiscal year (April 2023 to March 2024) to 7.6 percent, as per data released by the National Statistical Office (NSO) last week.
