Fitch Ratings ups India's growth potential to 6.4 pc over next 5 years

GLOBAL rating agency Fitch Ratings on Thursday raised India's GDP growth potential by 0.2 percentage points to 6.4 per cent over the next five years, on the back of a sharper rise in the country’s labour force participation rate in recent years.

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Fitch highlighted that the revised estimate for India shows a stronger contribution from labour inputs, mainly total employment, rather than labour productivity.

At the same time, the global rating agency has scaled down China's growth projection by 0.3 percentage points to 4.3 per cent from 4.6 per cent earlier.

The changes are part of Fitch's revised assessment of potential GDP growth for 10 emerging market economies over the next five years.

Fitch said, "Our estimate of India's trend growth is slightly higher at 6.4 per cent, compared with 6.2 per cent previously. We think TFP growth will slow from recent years to be in line with its long-run average of 1.5 per cent.”