June 24th 2024.
The global financial giant S&P has made a statement on Monday regarding India's economic growth. According to their forecast, the country's GDP is expected to remain at 6.8% for the current financial year. They also mentioned that the demand for goods and services may decrease due to high interest rates and lower fiscal incentives.
In their outlook for the Asia Pacific region, S&P noted that India's economy has been performing better than expected, with a growth rate of 8.2% in the fiscal year 2023-24. However, they believe that this growth will slow down to 6.8% in the current fiscal year. This is due to the impact of high interest rates and reduced government spending on non-agricultural sectors.
Looking ahead, S&P has projected growth rates of 6.9% and 7% for the fiscal years 2025-26 and 2026-27, respectively. These estimates are slightly lower than those of the Reserve Bank of India, which recently predicted a growth rate of 7.2% for the current fiscal year. Other agencies such as Fitch, the Asian Development Bank, Moody's, and Deloitte have also made their own forecasts, ranging from 6.6% to 7.2% for India's GDP growth in the coming years.
Meanwhile, S&P has also revised its growth forecast for China, predicting a growth rate of 4.8% in 2024, up from their previous estimate of 4.6%. However, they do anticipate a slowdown in the second quarter due to lower consumer spending and increased investment in manufacturing. This is expected to have an impact on prices and profit margins.
In summary, S&P's forecast for India's economic growth remains at 6.8% for the current fiscal year, with a slight decrease expected due to high interest rates and reduced government spending. However, they remain optimistic about the country's future growth, projecting rates of 6.9% and 7% for the following fiscal years.
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