The Indian economy is expected to clock a higher growth of 6.3% — one of the highest in the world — in the current fiscal aided by sustained momentum in manufacturing output and infrastructure spending, Fitch Ratings said on Thursday, June 22.
The agency has revised upwards the growth forecast from 6% projected in March.
The economy also continues to benefit from high bank credit growth and infrastructure spending (with more to come from the latter), Fitch added. “The stronger outturn in 1Q23 (March quarter) and near-term momentum have prompted us to upgrade our FY23-24 growth forecast to 6.3% — revised up from 6% in March — one of the highest growth rates in the world,” said the June update to Fitch’s Global Economic Outlook. RBI has projected India’s GDP to grow 6.5% in the current fiscal year.
Tag: Fitch
-
Fitch ups India’s growth forecast to 6.3% on mfg, infra spending
-
Fitch cuts India’s growth forecast to 8.5% on high oil prices, inflation
Rating agency Fitch on Tuesday , March 22, slashed India’s growth forecast for the next fiscal to 8.5% from 10.3%, citing soaring energy prices and rising inflation on account of the Russia-Ukraine war. It has revised upwards the GDP growth forecast for the current fiscal by 0.6 percentage points to 8.7%. “However, we have lowered our growth forecast for FY 2022-2023 to 8.5% (-1.8 pp) on sharply higher energy prices,” Fitch said. For 2023-24, it is estimated at 7%. In its Global Economic Outlook-March 2022, Fitch said the post-Covid pandemic recovery is being hit by a potentially huge global supply shock that will reduce growth and push up inflation.
“The war in Ukraine and economic sanctions on Russia has put global energy supplies at risk. Sanctions seem unlikely to be rescinded any time soon,” the agency said.
Last week, another global rating agency Moody’s had slashed India’s growth estimate for the 2022 calendar year to 9.1% from 9.5% earlier, saying high fuel and fertiliser import bill could limit capital expenditure.
Russia supplies around 10% of the world’s energy, including 17% of its natural gas and 12% of oil.
-
Fitch slashes India’s GDP growth forecast to 8.4%
New Delhi (TIP): Fitch Ratings on Wednesday, Dec 8, cut India’s economic growth forecast to 8.4% for the current fiscal ending March 31, 2022, saying the rebound after the second wave of Covid infections has been subdued than expected. Fitch, which had previously forecast a GDP growth of 8.7% in 2021-22 (April 2021 to March 2022), however, raised the economic growth projection for the next financial year (FY23) to 10.3% from previously forecast 10%.
The economy had contracted by 7.3% in the 2020-21 fiscal as restrictions imposed to curb spread of coronavirus pummelled business activity. “India’s economy staged a strong rebound in 3Q21from the Delta variant-induced sharp contraction,” Fitch said in its Global Economic Outlook.
The GDP rose a sharp 11.4% when compared to the preceding April-June quarter when it had slumped 12.4%. “However, the bounce was more subdued than we expected in our September GEO. The rebound in the services sector was weaker than hoped for,” it said. Nevertheless, business surveys and mobility data point to activity growing robustly in 4Q21. Growth in the manufacturing sector is constrained by ongoing supply shortages, but the supply bottlenecks are expected to ease in the coming months. Source: PTI
-
Fitch cuts India’s growth forecast from 10% to 8.7%
New Delhi (TIP): Fitch Ratings has cut India’s economic growth forecast to 8.7% for the current fiscal but raised GDP growth projection for FY23 to 10%, saying the second Covid wave delayed rather than derail the economic recovery.
In its APAC Sovereign Credit Overview, Fitch Ratings said India’s ‘BBB-/Negative’ sovereign rating “balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors”.
The ‘Negative’ outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India’s public finances due to the pandemic shock.
Fitch said it has further lowered India’s GDP forecast for the fiscal year ending March 2022 (FY22) to 8.7% from 10% in June as a result of the severe second virus wave.
It had in June cut the growth forecast from 12.8%. The projections for 2021-22 fiscal compares to a contraction of 7.3% recorded in the last financial year and a 4% growth in 2019-20.
“In our view, however, the impact of the second wave was to delay rather than derail India’s economic recovery, reflected in an upward revision of our FY23 (April 2022-March 2023) GDP forecast to 10% from 8.5% in June,” it said.
High-frequency indicators point to a strong rebound in the second quarter of the current fiscal (April 2021-March 2022), as business activity has again returned to pre-pandemic levels.
Fitch, however, saw a wider fiscal deficit. “We forecast a 7.2% of GDP (excluding disinvestment) Central government deficit in FY22,” it said. The government on June 28 announced a fiscal package worth about 2.7% of GDP. Much of this consists of loan guarantees, with only 0.6% of GDP in higher on Budget spending. Source: PTI