Fitch increases India’s FY24 GDP prediction to 6.3% due to solid economic growth

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Fitch Ratings increased its growth prediction for the Indian economy for the current fiscal year from 6% to 6.3% due to the solid first-quarter growth and strong near-term momentum.

India’s economy is one of the fastest-growing in the world, it said in a statement. “The economy also continues to benefit from high bank credit growth and infrastructure spending with more to come from the latter.”

According to the Reserve Bank of India, the GDP would expand by 6.5% in FY24.

The slowdown in international business would have some influence on India, according to Fitch, but the full effects of the Reserve Bank of India’s (RBI) 250 basis point (bps) monetary tightening have yet to be realized.

However, it stated that investment is anticipated to be supported by the government’s desire to expand capital spending, stable commodity prices, and strong credit growth.

“Slowing inflation should also start to help consumers over time, and households have now turned more optimistic about future earnings and employment,” the rating agency stated.

Even though inflation has decreased recently, according to Fitch, the second half of the year is still in danger due to the monsoon forecast and the probable effects of El Nino.

Retail inflation in India decreased to 4.25% in May from 4.7% in April, remaining for a third consecutive month within the RBI’s target range of 2%-6%.