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Updated March 14th, 2024 at 12:28 IST

Fitch revises India’s FY25 GDP forecast to 7% on improved EM prospects

The American credit rating agency anticipates India's GDP growth to reach 7.8% for the fiscal year ending March 2024 (FY24) and maintain a growth rate of 7%.

Reported by: Business Desk
Fitch Ratings raises India's mid-term growth forecast
Fitch Ratings | Image:Fitch ratings
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Fitch’s GDP forecast: Credit rating agency Fitch Ratings has revised FY25 GDP growth forecast for India to 7 per cent from the previous estimate of 6.5 per cent. 

The agency has noted a positive outlook for Emerging Markets (EM) excluding China, particularly highlighting India's improved prospects, said media reports.  

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The American credit rating agency anticipates India's GDP growth to reach 7.8 per cent for the fiscal year ending March 2024 (FY24) and maintain a growth rate of 7 per cent in FY25, marking upward revisions, as per media reports. 

Fitch projects a moderation in growth momentum in the final quarter of the current fiscal year, leading to an estimated growth rate of 7.8 per cent for FY23-24.

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Fitch also expects the Reserve Bank of India to implement a 50 basis points rate cut between July and December. It also forecasts a gradual decline in India's Consumer Price Index (CPI) inflation to 4 per cent by the end of 2024.

In terms of China's economy, Fitch lowered its 2024 growth forecast to 4.5 per cent from 4.6 per cent, citing concerns about the country's property sector and deflationary pressures. However, Fitch, as per the media reports, has acknowledged that China's authorities have been increasing fiscal support measures, which have helped mitigate the impact on the forecast.

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Earlier, Moody's Investors Service had raised India's 2024 GDP growth estimate to 6.8 per cent, emphasizing the country's resilient economic performance. With global challenges diminishing, Moody's anticipates India to sustain a growth rate of 6-7 per cent in real GDP, forecasting around 6.8 per cent growth for the calendar year 2024, followed by 6.4 per cent in 2025.

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Published March 14th, 2024 at 12:28 IST

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