Fitch raises India’s FY25 growth forecast to 7%

Fitch raises India's FY25 growth forecast to 7%

Fitch’s Revised Growth Forecast for India:

  • Fitch Ratings raised India’s GDP growth prediction for fiscal year 2024 to 7.8% and for 2025 to 7.0 percent.
  • This higher revision is linked to solid economic growth, which is primarily driven by domestic demand and investment.
  • India’s real GDP growth has routinely outpaced quarterly estimates, with significant increases in investment and private consumption.

Factors driving India’s growth:

  • India’s economic growth is being driven by strong domestic demand as well as sustained levels of corporate and consumer confidence.
  • Fitch anticipates domestic demand, particularly investment, to remain the primary growth engine, surpassing the economy’s short-term potential.
    Comparison to the Global Economic Outlook:
  • Fitch has boosted its 2024 global GDP growth prediction to 2.4%, citing improving short-term global economic prospects.
  • The agency emphasizes a 2.1% boost in the US growth prediction, as well as minor revisions to China and the eurozone forecasts.
  • Emerging markets, excluding China, are predicted to grow, with India, Russia, and Brazil receiving higher estimates.

Challenges and risks:Fitch raises India’s FY25 growth forecast to 7%

  • While the growth forecast for India appears favorable, there are difficulties and dangers to consider, such as probable normalization of the gap between GDP and gross value-added.
  • Food price volatility and inflation will have a significant impact on economic conditions and the Reserve Bank of India’s monetary policy decisions.

Monetary Policy Outlook:

  •  Retail inflation in India was constant at 5.1% in February, with core inflation indicators continuing their decrease.
  • Fitch anticipates headline inflation to fall steadily to 4% by the end of the calendar year, assuming recent food price volatility has subsided.
  • The RBI has left its benchmark policy rate constant at 6.5% and continues a hawkish policy stance, trying to push inflation closer to target.

MORE than : Current Affairs 

This Post Has One Comment

Leave a Reply