New Delhi, Dec 13: Fitch Ratings has revised India's GDP growth forecast for the fiscal year 2024-25 to 6.4%, down from its previous estimate of 7.0%. This adjustment follows a similar reduction by the Reserve Bank of India (RBI), which lowered its growth forecast to 6.6% from 7.2%.
Fitch anticipates India's economy will expand by 6.4% in 2024-25 and 6.5% in 2025-26, a slowdown from the 8.2% growth in 2023-24. Despite this, the rating agency emphasized that India's growth remains robust compared to global peers.
Fitch highlighted that India has rebounded strongly from the impact of the COVID-19 pandemic. While recent economic indicators show some mixed signals, the agency does not foresee a prolonged downturn in activity. Domestic demand is expected to continue driving growth, even amid potential trade tensions between the US and China and a global slowdown in trade.
The agency also pointed to the ongoing policy focus on key growth drivers, such as infrastructure development, digitalization, and improvements in the ease of doing business, alongside the government's commitment to fiscal consolidation. Public infrastructure capital expenditure (capex) is expected to remain a key support for the economy, along with sectors linked to infrastructure. Furthermore, improved financial health in banks and corporate balance sheets is expected to foster a positive investment cycle, encouraging increased capital spending.
For the July-September quarter of the 2024-25 fiscal year, India's economy grew by 5.4% in real terms, falling short of the RBI's forecast of 7%.
