S&P Global raises India's FY24 GDP growth forecast by 40 bps to 6.4%

Utkarsh Classes Last Updated 28-11-2023

S&P Global raises India's FY24 GDP growth forecast by 40 bps to 6.4%

Report 5 min read

S&P Global Ratings released its report titled "Economic Outlook Asia-Pacific Q1 2024: Emerging Markets Lead the Way" on 27 November 2023 according to which, India's GDP growth for FY 2024 (ending March 2024) has revised its estimate to 6.4 percent.

S&P Global Ratings on November 24, 2023 raised India's gross domestic product (GDP) growth forecast for fiscal year 2023-24 to 6.4 percent from 6 percent earlier.

Reason for increase in estimate:

The increase was mainly attributed to strong internal momentum that offset headwinds arising from rising food prices and sluggish exports.

Reduced to 6.4 percent for FY 2025:

Whereas, for FY2025, the GDP growth forecast has been reduced by 50 basis points (bps) to 6.4 per cent.
- Growth is expected to remain subdued in the second half of the financial year amid slow global growth, a high base and the impact of rate hikes. As a result, it has lowered its outlook for growth in fiscal year 2025.
According to S&P Global, fixed investment in the country has recovered more than private consumer spending. However, the agency's estimate is lower than the central bank RBI's estimate of 6.5%.

GDP growth forecast for FY 2026 unchanged at 6.9%:

For fiscal year 2026, S&P has kept India's GDP growth forecast unchanged at 6.9%.

S&P Global's estimates on inflation:

On inflation, S&P Global said that in FY2024, India is expected to report inflation of 5.5%, under the Reserve Bank of India's (RBI) upper tolerance limit of 6%. It is expected to be 4.5 percent less in fiscal year 2025.

Repo rate estimates in the coming years:

The report's projections show that the repo rate is expected to remain unchanged at 6.5 per cent at the end of FY2024. According to S&P Global, the repo rate is expected to be 5.5 percent at the end of FY2025 and 5.25 percent at the end of FY2026.

Asia-Pacific region expected to see good growth in report:

The report further said that the Asia-Pacific region is likely to register good growth this year.
Growth is on track to be strongest this year and next in emerging market economies with solid domestic demand: India, Indonesia, Malaysia and the Philippines, according to the report.

It is noteworthy that the Indian economy had grown by 7.2 percent in the financial year 2022-23 ending March 2023. Whereas India's GDP grew by 7.8 percent in the April-June quarter.

Standard & Poor's (S&P):

Standard & Poor's is an American financial intelligence company that operates as a division of S&P Global. S&P is a market leader in the provision of financial market analysis, particularly in the provision of benchmark and investable indices and credit ratings for companies and countries.
S&P Global provides credit ratings, benchmarks, data, and digital and traditional financial research and analytical tools to capital and commodity markets globally.

FAQ

Answer:- S&P Global Ratings released its report titled “Economic Outlook Asia-Pacific Quarter 1 2024: Emerging Markets Lead the Way” on 27 November 2023, according to which, India for FY 2024 (ending March 2024) It has revised its GDP growth estimate to 6.4 percent.

Answer:- According to the report released by S&P Global Ratings in November 2023, it has revised its estimate of India's GDP growth for fiscal year 2024 (ending March 2024) to 6.4 percent.

Answer:- The Asia-Pacific region was estimated to have good growth in the report released by S&P Global Ratings.

Answer:- Standard & Poor's is an American financial intelligence company that operates as a division of S&P Global.