“Roaring Tigers, Slowing Dragons”: India’s Economy Has a History of Rapid Growth: S&P

India’s economy has a history of robust development, according to S&P Global Ratings, which on Wednesday maintained its 6% growth prediction for the current fiscal year. According to S&P, rising productivity, favorable demographics, and progressive capital deepening are crucial growth drivers in the report “Slowing Dragons, Roaring Tigers: Asia-Pacific Credit Outlook 2024.”

India’s economy has consistently grown at a rapid pace. We anticipate that this trend will continue, with growth of 6% in FY 2024, 6.9% in FY 2025, and 6.9% in FY 2026, according to S&P. It said that India’s economic expansion is dazzling. Its rates are still higher than they have traditionally been, however, which increases pressure on the cost of financing India’s substantial debt pile.

The US-based rating agency said that although growth fosters revenue creation and market confidence, rates dynamics would also influence India’s debt trajectory in the coming years. Important growth determinants include rising productivity, favorable demography, and progressive capital deepening.

“Climate resilience, business environment improvements, and labor force participation are challenges for unlocking the next phase of growth,” according to S&P.

According to the statement, the robust expansion of the services sector is crucial for the Indian economy.

Over time, the economy’s reliance on services has increased, while that of agriculture and other basic sectors has decreased. The statement went on, “We expect the share of services in the economy to rise further as long as comparative advantages exist in that space.”