The growth projection is in comparison to the 7.2% GDP growth in FY23. The economy had expanded by 9.1% in the preceding fiscal year (FY22).
Image source: The economic times
On June 22, Fitch Ratings increased its prediction for India’s economic growth to 6.3% for the current fiscal year 2023–2024 from its earlier projection of 6%.
The first quarter’s higher performance and recent momentum are the main causes of this.
In comparison, the FY23 GDP growth rate was 7.2%. The GDP grew 9.1% over the preceding fiscal year (FY22).
The rating agency observed that the Indian economy has been demonstrating general strength, with GDP growing by 6.1% year over year in 1Q23 (January to March) and vehicle sales, PMI surveys, and credit growth continuing to expand well in recent months. As a result, the rating agency increased its forecast for the fiscal year ending in March 2024 (FY23-24) by 0.3 percentage points to 6.3%.
Prior to this month, Fitch had lowered its forecast for 2023–2024 from 6.2% to 6%, citing headwinds from rising inflation and interest rates as well as sluggish global demand.
It predicted growth of 6.5% in each of the fiscal years 2024–2025 and 2025–2026.
While the rating agency noted that the GDP growth from January to March was greater than anticipated, it also noted that manufacturing has recovered after two consecutive quarterly contractions, as well as an uptick in construction and agriculture production.
GDP increase in terms of expenditures was fueled by domestic demand and a boost from net trade.
