India FY25 GDP: Fitch slashes India’s growth forecast to 6.4% from 7% for 2025-26
India's GDP growth forecast for FY25 has been adjusted to 6.4 per cent by Fitch Ratings, reflecting a decline from previous expectations. Despite this, Fitch remains optimistic about India's recovery, citing strong domestic demand and infrastructure investments as key growth drivers.
India's growth forecast: US-based credit rating agency, Fitch Ratings on Friday revised India's GDP forecast to 6.4 per cent to 7 per cent for FY25.
This cut comes after the Reserve Bank of India (RBI), in its recent monetary policy committee (MPC), revised India's growth forecast to 6.6 per cent from 7.2 per cent.
Fitch expects the GDP to rise by 6.4 per cent in FY25 and 6.5 per cent in FY26, slowing from 8.2 per cent in FY24.
The rating agency, however, feels that India is doing relatively better than its global peers.
“The Indian economy recovered strongly from the Covid-19 pandemic shock. Although indicators point to a more mixed picture in recent months, we do not think that the softness will translate into a prolonged slump in economic activity,” Fitch said in its report.
Domestic demand will continue to promote growth in the Indian economy amid the potential trade war between the United States and China along with the slowdown of global trade.
The continuity of policies such as infrastructure drive, digitalisation, and ease of doing business measures has driven growth in key sectors even as the government follows a fiscal consolidation approach, Fitch said.
The capital expenditure of public infrastructure will continue to support the economy and the assets that are directly related to this sector. Additionally, the healthy performance of bank and corporate balance sheets in the recent years will bring investments and quicker capital spending in the economy, according to the rating agency.
In the July-September quarter of FY25, the Indian economy grew 5.4 per cent, which is lower than the RBI's forecast of 7 per cent.
Similarly, in the April-June quarter the Indian economy grew 6.7 per cent, lower than RBI's expectations.
Real GDP
According to the Economic Survey released this year, India's real GDP growth was projected at 6.5-7 per cent for FY25, saying that the market expected higher numbers. The real GDP growth takes into account inflation as well.
In FY24, India's GDP grew 8.2 per cent, making its mark as one of the fastest-growing economies in the world. In FY23, the economy grew 7.2 per cent and it grew 8.7 per cent in FY22.
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Business NewsEconomyIndia FY25 GDP: Fitch slashes India’s growth forecast to 6.4% from 7% for 2025-26
First Published:13 Dec 2024, 08:17 PM IST
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