New Delhi:
Fitch Ratings on Thursday raised its forecast for India’s economic growth to 6.3 percent for the current fiscal year 2023-24 from the 6 percent previously forecast.
This is mainly due to a stronger result in the first quarter and short-term momentum.
The growth forecast is comparable to GDP growth of 7.2 percent in FY23. In the previous fiscal year (FY22), the economy had grown by 9.1 percent.
“India’s economy has shown broad-based – with GDP rising 6.1 percent year-on-year in 1Q23 (January-March) and auto sales, PMI surveys and credit growth remaining robust in recent months – and we have forecast increased for the fiscal year ending March 2024 (FY23-24) by 0.3 percentage point to 6.3 percent,” the rating agency said.
Fitch had cut his forecast for 2023-2024 from 6.2 percent to 6 percent in March, citing headwinds from high inflation and interest rates, along with weak global demand.
For fiscal years 2024-25 and 2025-26, it estimated growth of 6.5 percent each.
Inflation has since declined and the domestic economy has picked up.
Fitch stated that January-March GDP growth was higher than expected, saying there is a recovery in manufacturing after two consecutive quarterly contractions, a boost from construction and an increase in agricultural production.
In terms of expenditure, GDP growth was driven by domestic demand and a boost from the trade balance.
(This story has not been edited by DailyExpertNews staff and is auto-generated from a syndicated feed.)