S&P Global Ratings has revised its projections on India’s Gross Domestic Product (GDP) growth to 6.4 percent in FY24 from its previous estimate of 6 percent.
This upward revision is attributed to the resilience of domestic momentum, which has effectively mitigated the impact of challenges arising from high food inflation and weak exports.
The global rating firm, however, has reduced its GDP growth projection for India in the FY25 to 6.4 percent, marking a decline from the earlier forecast of 6.9 percent.
The adjustment is based on the expectation of a slowdown in the latter half of the year, influenced by factors such as muted global economic growth, an elevated baseline, and the delayed impact of interest rate hikes implemented by the Reserve Bank of India.
S&P Global Ratings said it believes India’s interest rate cycle will take time to shift, citing persistent headline inflation above the RBI’s 4 percent target.
Despite a temporary spike in food inflation in the July-September quarter, the agency noted minimal impact on the underlying inflation dynamics.
On the Asia-Pacific front, S&P Global foresees strong overall growth, particularly in emerging market economies driven by solid domestic demand.
Countries such as India, Indonesia, Malaysia, and the Philippines are expected to lead this growth, according to its report, titled ‘Economic Outlook Asia-Pacific Q1 2024: Emerging Markets Lead the Way’.
As for China, the ongoing property challenges are dampening global economic prospects, with the report projecting GDP growth at 5.4 percent in 2023 and 4.6 percent in 2024.
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