Fitch Ratings on Tuesday retained India's economic growth forecast at 7 per cent for the current fiscal, reported by the PTI. According to the report, Fitch said that India could be one of the fastest-growing emerging markets this year.
The rating agency, however, slashed the projections for the next two financial years, stating that even though the country is shielded to some extent from global economic shocks but is not impervious to global developments.
During the December edition of the Global Economic Outlook, Fitch forecast India's GDP to grow at 7 per cent in the current fiscal and slow to 6.2 per cent in 2023-24 and 6.9 per cent in 2024-25. In September, Fitch had projected 7 per cent growth for the current fiscal year, followed by 6.7 per cent in 2023-24 and 7.1 per cent growth in 2024-25.
Given the stronger-than-expected outturn, Fitch forecasts growth at 7 per cent in the financial year ending March 2023 (FY23). "India is expected to record one of the fastest growth rates among emerging markets in our Fitch20 coverage this year," it said.
India is shielded to some extent from global economic shocks given the domestically focused nature of its economy, with consumption and investment making up the bulk of the country's GDP. "However, India is not impervious to global developments. The worldwide economic slump is expected to reduce demand for Indian exports," Fitch said.
Meanwhile on Tuesday, the World Bank in its latest report said that India's GDP growth is expected to grow 6.9 per cent in the current fiscal year (FY23). According to the World Bank report, India is projected to be one of the fastest-growing major economies. Slowdown in emerging economies could also position India as an attractive alternate investment destination.
India is affected by spillovers from US, Euro area, and China, the update mentioned. On the other hand, inflation is expected to be 7.1 per cent in FY23. The World Bank also said that the Indian government on course to meet fiscal deficit target of 6.4 per cent.