Fitch Ratings, an American credit rating agency, has revised its forecast for India’s gross domestic product (GDP) growth rate to seven per cent for the upcoming financial year 2024-25, citing robust domestic demand and improved business and consumer confidence. This is an upward revision from the earlier forecast of 6.5 per cent. The country’s economy demonstrated strong performance during the third quarter (October-December) of the current financial year, achieving a growth rate of 8.4 per cent, surpassing expectations. Consequently, Fitch anticipates the economic growth rate for the ongoing financial year 2023-24 to be 7.8 per cent, slightly higher than the government’s estimate of 7.6 per cent.
In its latest Global Economic Outlook, the rating agency noted that India’s economic growth is outperforming quarterly estimates, propelled by a surge in domestic demand. Investment growth has surged by 10.6 per cent annually, while private consumption has seen a 3.5 per cent increase. Additionally, Fitch Ratings has raised its global growth forecast for 2024 by 0.3 percentage points to 2.4 per cent. The agency remains optimistic about future growth prospects, suggesting an improvement in the near term.
Fitch Ratings has raised its growth rate estimate for the United States to 2.1 per cent. In the global economic outlook for December 2023, this estimate stood at 1.2 per cent. The agency stated, “The slight reduction in China’s growth forecast has not affected due to the United States Of America’s improving growth prospects.” China’s growth rate estimate has been revised down from 4.6 to 4.5 per cent. Additionally, Fitch Ratings has adjusted the Euro area’s growth estimate from 0.7 per cent to 0.6 per cent.
Earlier, Moody’s Ratings had increased India’s GDP (gross domestic product) growth rate estimate from 6.6 per cent to about eight per cent for the financial year 2023-24 given the increase in capital expenditure and domestic consumption. This estimate came a day after the statement of RBI Governor Shaktikanta Das. In the statement, he said that looking at the official GDP figures of the third quarter, the economic growth in the current financial year could be close to eight per cent. Moody’s latest estimate is 1.40 per cent more than the 6.6 per cent estimate given in November 2023.
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