On Thursday, Fitch Ratings raised India’s growth forecast to 6.3% for FY 2023–2024.The previous prediction was 6%, but the revision is due to near-term momentum. Additionally, the stronger first-quarter performance contributed to the upward adjustment. This growth projection is in comparison to the 7.2% GDP growth achieved in FY23. In the preceding fiscal year (FY22), the economy expanded by 9.1%.
Several reasons were cited for the revision.
- Private consumption is recovering strongly, backed by a favorable labor market and rising incomes.
- Investment is increasing due to government spending on infrastructure and a rebound in private investment.
- Exports continue to grow, benefiting from robust global demand.
However, Fitch also noted that there are some risks to the outlook, including:
- The ongoing war in Ukraine could have a negative impact on global growth and trade.
- Rising inflation could weigh on consumer spending.
- The government’s fiscal deficit could widen if revenue growth does not keep pace with spending.
Overall, Fitch’s forecast is positive for the Indian economy. However, there are some risks that could cloud the outlook.
Here are some other ratings agencies’ GDP forecast for India in 2023:
- Moody’s: 5.5%
- Goldman Sachs: 6.3%
- Standard & Poor’s: 6.3%
These forecasts are not definitive, and the growth rate may vary. The actual rate hinges on global economics, government policies, and Indian economy performance.
