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Fitch Ratings raises India's 2024/25 GDP forecast to 7.2%
India's growth forecast marks an upward revision of 0.2 percentage points versus their March forecast.
FILE PHOTO: Debashis Dhara, a vegetable vendor, speaks on his mobile phone at a retail market area in Kolkata, India, March 22, 2022. Picture taken March 22, 2022. / REUTERS/Rupak De Chowdhuri
India is expected to grow by 7.2 percent in the current fiscal year, stronger than earlier expected, with its central bank opting for just a one-quarter-point rate cut in that period, Fitch Ratings said in its quarterly Global Economic Outlook (GEO) report published on June 18.
The ratings agency has also raised its world growth forecast for 2024 to 2.6 percent from 2.4 percent earlier as confidence in European recovery prospects improve, China's export sector revives and domestic demand in emerging markets excluding China shows stronger momentum.
"We still expect the RBI to cut its policy rate this year, but only once, to 6.25 percent. In the March GEO we expected 50 basis points of cuts this year. We then expect 25 bps of cuts in both 2025 and 2026," Fitch wrote.
India's growth forecast marks an upward revision of 0.2 percentage points versus their March forecast.
"Investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence," Fitch said about India.
The agency, however, expects growth to slow in later years and approach their medium term trend estimate.
"We forecast real GDP growth of 6.5 percent in FY25/26 (unchanged from March), and 6.2 percent in FY26/27, driven by consumer spending and investment," they wrote.
Fitch expects headline inflation in the South Asian nation to continue declining to 4.5 percent by calendar year-end, and average 4.3 percent in 2025 and 2026, staying slightly above the mid-point of the Reserve Bank of India's 2 percent to 6 percent target range.
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