S&P cuts India's growth forecast to 7% for FY23

S&P had in September projected the Indian economy to grow 7.3% in 2022-23 and 6.5% in next fiscal year (2023-24).

S&P Global Ratings on November 28 cut India's economic growth forecast for current fiscal year to 7%, but said the domestic demand-led economy will be less impacted by the global slowdown.

S&P had in September projected the Indian economy to grow 7.3% in 2022-23 and 6.5% in next fiscal year (2023-24).

"The global slowdown will have less impact on domestic demand-led economies such as India... India's output will expand 7% in fiscal year 2022-2023 and 6% in next fiscal year," S&P Global Ratings Asia-Pacific chief economist Louis Kuijs said.

The Indian economy grew 8.5% in 2021. In its quarterly economic update for Asia-Pacific, S&P said in some countries the domestic demand recovery from COVID has further to go and this should support growth next year in India.

It projected inflation to average 6.8% in current fiscal year and RBI's benchmark interest rate to rise to 6.25% by March 2023. To control price rise, RBI has already hiked interest rate by 1.9 percentage points to a 3-year high of 5.9%.

India's wholesale and retail inflation fell in October after remaining high for most part of the year mainly due to supply chain disruptions following the outbreak of the Russia-Ukraine war in February.