S&P retains India's growth forecast for FY24 at 6%
What's the story
S&P Global Ratings has maintained India's growth forecast for the current fiscal year at 6%, despite challenges such as the slowing world economy, rising risk of subnormal monsoons, and delayed effect of interest rate hikes. The agency also revised the full fiscal retail inflation forecast to 5.5%, up from 5% earlier, due to higher global oil prices.
Details
Asia Pacific Q4 2023 report highlights
According to S&P's Economic Outlook for Asia Pacific Q4 2023 report, India's GDP grew by 4.2% quarter on quarter, reaching a level 7.8% higher than a year ago. The report highlights that the Asia Pacific region remains a "multi-speed region" and slightly raised its forecast for 2023 to 3.9% amid domestic resilience. India's strong consumption growth and capital expenditure in the June quarter have contributed to this regional growth.
Insights
S&P optimistic for India's future growth
S&P Global Ratings also provides insights into India's economic growth for FY25 and FY26, maintaining a forecast of 6.9% for both years. Earlier in September, India Ratings and Research revised its GDP growth estimate for India in FY24 to 6.2%, up from the previous projection of 5.9%. This revision was based on factors such as sustained government capital expenditure, deleveraged balance sheets of corporates and the banking sector, and the prospect of a new private corporate capital expenditure cycle.
Insights
A mixed outlook for growth
For FY23, India achieved a growth rate of 7.2%, surpassing the Reserve Bank of India's (RBI) estimate of 7%. Nevertheless, this growth rate marked a slowdown compared to the remarkable 9.1% recorded in FY22. S&P acknowledges that growth in India this year is expected to be weaker compared to 2022. However, it maintains a broadly favorable outlook for the Indian economy in FY24.