S&P Global Ratings has retained its growth forecast for India at 6.8% for the FY25. The rating agency cited high interest rates and lower fiscal boost as factors that will temper demand in the non-agricultural sectors, moderating growth from the previous fiscal year’s strong performance. S&P revised its GDP growth forecast for India in FY24 to 8.2%, acknowledging the country’s economic growth, which continues to surprise on the upside. The agency projects India’s economy to grow at 6.9% and 7% in FY26 and FY27, respectively.
The rating agency expects the Reserve Bank of India (RBI) to reduce its policy rate to 6% in the current financial year from 6.5%. Additionally, S&P anticipates further cuts in the lending rate to 5.5% and 5.25% in FY26 and FY27, respectively. However, S&P’s growth projections are lower than those of the RBI, which raised its growth projection for FY25 to 7.2% from an earlier estimate of 7%. The rating agency projected India’s retail inflation to be 4.5% in FY25, which aligns with RBI’s forecast. The RBI’s quarterly inflation projections for FY25 are 5%, 4%, 4.6%, and 4.7%.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
