Fitch has revised India’s real gross domestic product (GDP) forecast for FY25 to 7% from the previous estimate of 6.5%. This upward adjustment reflects strong domestic demand and sustained business and consumer confidence growth. However, Fitch has softened its expectations regarding potential rate cuts.
Fitch expects India’s economy to maintain robust expansion, projecting a 7% growth rate for FY25, 50 basis points (bps) increase from its previous forecast. Despite a slight moderation in growth momentum for the October-December period of FY24, with an estimated growth rate of 7.8%, Fitch’s forecast exceeds the Indian government’s revised estimate of 7.6% for the fiscal year 2024. The agency highlights domestic demand, particularly investment, as the main growth driver, supported by ongoing confidence levels. Additionally, Fitch predicts a steady decline in retail inflation to 4% by year-end, contingent on subsiding food price volatility.
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