India to grow at 7.2% in FY25 on consumer spending, investment

Fitch Ratings on Tuesday upgraded India's growth forecast for the current fiscal, FY2024-25 to 7.2 per cent, a revision from 7 per cent projected in March 2024, on recovery in consumer spending with elevated consumer confidence even as investment continues to rise but more slowly than in recent quarters.

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In an update to its global economic outlook report, Fitch said it expects inflation to decline to 4.5 per cent by end of this year and RBI to cut policy interest rates by 25 basis points to 6.25 per cent.

The rating agency expects growth in later years to slow and approach its mediumterm trend estimate, forecasting real GDP growth of 6.5 per cent in FY26 (unchanged from March), and 6.2 per cent in FY27, driven by consumer spending and investment.