INDIA'S FY24 GROWTH FORECAST AT 6 PER CENT, SAYS S&P

S&P’s decision to maintain India’s growth forecast reflects global economic challenges, monsoon uncertainties, and delayed rate hike effects, shaping a cautious outlook for fiscal 2024

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S&P Global Ratings has maintained its growth forecast for India in the current fiscal year at 6 percent, citing several factors including a slowing global economy, the risk of subnormal monsoons, and the delayed impact of rate hikes. Despite a strong expansion in the Indian economy during the June quarter, S&P remains cautious about fiscal 2024 due to these economic challenges. The agency also revised up its full fiscal year retail inflation forecast to 5.5 percent, up from 5 percent, primarily due to higher global oil prices.

The Indian economy grew by 7.2 percent in the fiscal year 2022-23, which ended in March 2023. While S&P retained its growth projection of 6 percent for the current fiscal year, it anticipates a growth rate of 6.9 percent for both the fiscal years 2024-25 and 2025-26. S&P noted that India’s consumption growth and capital expenditure remained robust during the June quarter.

In the context of the Asia Pacific region, S&P highlighted that the region exhibits varying growth rates, describing it as a “multi-speed region.” It slightly raised its growth forecast for the region in 2023 to 3.9 percent due to domestic resilience. Despite global economic challenges, year-on-year GDP growth increased in the second quarter in both developed and emerging Asian economies, with India leading the way.