S&P cuts India's growth forecast to 7% for FY23
The Hindu
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.
The decline in India’s net foreign direct investment (FDI) inflows, which have dropped almost 31% to $25.5 billion over the first ten months of 2023-24, is in line with the slowdown in such investments to developing countries, the Finance Ministry has said, while holding out hope for an uptick in investments this year.