Fitch Raises India's GDP Growth Projection To 6.3% For Current Fiscal Year

Fitch Ratings, a global credit rating agency, has revised its GDP forecast for India, providing a more optimistic outlook for the country's economic growth. The agency has raised India's GDP growth projection to 6.3% from its previous estimate of 6% for the current fiscal year.

This is mostly due to near-term momentum and a superior first-quarter performance.

The growth estimate is in comparison to the 7.2% GDP growth in FY23. The economy had expanded by 9.1 percent in the preceding fiscal year (FY22).

"India's economy has been showing broad-based strength - with GDP up by 6.1 per cent year-on-year in 1Q23 (January-March) and autosales, PMI surveys and credit growth remaining robust in recent months - and we have raised our forecast for the fiscal year ending in March 2024 (FY23-24) by 0.3 percentage points to 6.3 per cent," the rating agency said.

Fitch lowered its 2023-24 prediction in March from 6.2% to 6.0%, noting challenges from high inflation and interest rates as well as weak global demand.

It predicted growth of 6.5% for both the 2024-2025 and 2025-2026 fiscal years.

Since then, inflation has decreased and the domestic economy has expanded.

Fitch stated that the GDP growth in January-March was stronger than anticipated and that there has been a resurgence in manufacturing after two consecutive quarterly contractions, as well as an uptick in construction and agriculture output.

GDP increase in terms of expenditures was fueled by domestic demand and a boost from net trade.