Fitch raises FY25 India GDP growth forecast to 7.2 per cent
Fitch Ratings has raised India's growth forecast for FY25 to 7.2% from 7% earlier, on the back of elevated consumer confidence that is expected to drive spending and increased investments, but cautioned that the ongoing heatwave was a risk to both growth and inflation.
In its Global Economic Outlook (GEO) released Monday, it raised its forecast for world growth in 2024 to 2.6% from 2.4% estimated earlier. India's economy grew 8.2% in FY24. «We expect the Indian economy to expand by a strong 7.2% in FY25 (an upward revision of 0.2pp from the March GEO),» Fitch Ratings said, adding that investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence. Purchasing managers survey data point to continued growth at the start of the current financial year.
Earlier this month, RBI had revised upwards the country's GDP forecast by 20bps to 7.2%. As per the report, signs of the coming monsoon season being more normal should support growth and make inflation less volatile, though a recent heatwave poses a risk. «We expect growth in later years to slow and approach our medium-term trend estimate,» it said.
Fitch Ratings' revised forecast is higher than that of the International Monetary Fund (IMF) and Asian Development Bank (ADB). In April, the IMF revised its projection to 7% from 6.8% for the current fiscal while ADB revised its projection to 7% from 6.7%.
S&P expects 6.8% growth in India's economy. It said that at its latest meeting, the RBI
