S&P Global shows rise in India’s growth forecast for 2024-25

S&P Global raises India's FY25 GDP growth forecast by 40 bps to 6.8%

March 26, 2024

In November, last year, S&P Global had projected India's growth to be 6.4 percent

S&P ups India growth forecast to 6.8% for FY’25

On Tuesday, S&P Global Ratings, in its Economic Outlook for the Asia Pacific, raised India’s growth forecast for 2024-25 by 0.4 percent to 6.8 percent on the back of strong domestic demand.

S&P Global Ratings said, “For Asian emerging market (EM) economies, we generally project robust growth, with India, Indonesia, the Philippines, and Vietnam in the lead.”

In November, last year, S&P Global had projected India’s growth to be 6.4 percent in the 2024-25 fiscal on robust domestic momentum.

However, despite the hike, the latest projection by the global rating agency is lower than the 7 percent estimates projected by the RBI and the Finance Ministry for the next financial year.

In largely domestic demand-led economies such as India, Japan, and Australia, the impact of higher interest rates and inflation on household spending power reduced sequential GDP growth in the second half, S&P said.

S&P said it expects rate cuts of up to 75 basis points in India in the second half of the year in line with the US policy rates.

“In India, slowing inflation, a smaller fiscal deficit, and lower US policy rates will lay the ground for the Reserve Bank of India to start cutting rates. But we believe more clarity on the path of disinflation could push this decision at least to June 2024, if not later,” S&P said.

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