Fitch revises India’s FY25 GDP growth forecast to 7% from 6.5%

Global ratings agency Fitch Ratings raised India’s FY25 GDP growth forecast to 7 percent from 6.5 percent. Fitch said, “Prospects for EM (ex China) have also brightened, particularly in India, where we now expect growth to reach 7.8 percent in the fiscal year ending March 2024 (FY24) and 7 percent in FY25, both sizeable upward revisions. With GDP growth having exceeded 8 percent for three consecutive quarters, we expect an easing in growth momentum in the final quarter of the current fiscal year, implying an estimate of 7.8 percent for growth in FY23-24.”
The rating agency said that it expects 50 bps rate cut by the Reserve Bank of India from July to December and foresees India’s CPI inflation gradually declining to 4 percent by the end of 2024.
Fitch cut China’s 2024 forecast to 4.5 percent from 4.6 percent amid concerns over country’s property sector and deflationary pressures. Although, the ratings agency noted in its reported that China’s authorities have been stepping up fiscal support which has cushioned the impact on the forecast.
Earlier, Global ratings agency Moody’s Investors Service raised India’s 2024 GDP growth estimate to 6.8% saying, “India’s real GDP expanded 8.4% year-over-year in the fourth quarter of calendar year 2023, resulting in 7.7% growth for full-year 2023. We believe that with global headwinds fading, the Indian economy should be able to comfortably register 6-7% real GDP growth and we therefore forecast around 6.8% growth in calendar year 2024, followed by 6.4% in 2025.”