India’s GDP Growth Forecast Is Upgraded by Fitch Ratings to 7% for the Fiscal Year 2024–2025

Citing strong domestic demand and increased corporate and consumer confidence, American credit rating company Fitch Ratings has updated its prediction for India’s GDP growth rate to 7% for the forthcoming fiscal year 2024–2025. The previous prediction of 6.5% has been revised higher. In the third quarter of the current fiscal year, which ran from October to December, the nation’s economy performed well, exceeding forecasts with a growth rate of 8.4%. As a result, Fitch predicts that the GDP will rise by 7.8% in the current fiscal year 2023–2024—a marginal increase above the government’s projection of 7.6%.

The rating agency said in its most recent Global Economic Outlook that a rise in domestic demand is driving India’s economic growth, which is exceeding quarterly projections. Annual growth in investment has increased by 10.6%, whereas growth in private consumption has increased by 3.5%. Furthermore, Fitch Ratings increased its estimate for global growth in 2024 by 0.3 percentage points to 2.4%. The agency predicts a short-term recovery and is nonetheless upbeat about future development prospects.

The US growth rate is now expected to reach 2.1%, according to Fitch Ratings. This projection was reported at 1.2% in the December 2023 global economic outlook. “China’s growth forecast has not been affected by the United States of America’s improving growth prospects,” the agency said. The estimated growth rate for China has been lowered from 4.6 to 4.5 percent. Furthermore, the growth prediction for the Euro area has been revised by Fitch Ratings from 0.7% to 0.6%.

Prior to this, Moody’s Ratings raised its prediction for India’s GDP growth rate for the fiscal year 2023–24 from 6.6% to around 8% in light of rising capital spending and domestic consumption. This estimate was made one day following RBI Governor Shaktikanta Das’s remarks. According to the official third-quarter GDP numbers, he claimed in the announcement that the current fiscal year’s economic growth may reach around 8%. The most recent forecast from Moody’s is 1.40 percent higher than the 6.66 percent prediction from November 2023.