S&P retains India's FY24 growth forecast at 6% on slowing world economy, rising risk of subnormal monsoons
US-based agency sees the recent spike in vegetable price inflation as being temporary, but revised up full fiscal retail inflation forecast to 5.5%
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New Delhi: S&P Global Ratings on Monday retained India's growth forecast for current fiscal at six per cent citing slowing world economy, rising risk of subnormal monsoons and delayed effect of rate hike.
The US-based agency sees the recent spike in vegetable price inflation as being temporary, but revised up the full fiscal retail inflation forecast to 5.5 per cent, from five per cent earlier, on higher global oil prices. "Growth this year will be weaker than in 2022, but our outlook remains broadly favourable. Notwithstanding the strong expansion in India in the June quarter, we maintain our forecast for fiscal 2024 (ending March 2024), given the slowing world economy, the delayed effect of rate hikes, and the rising risk of subnormal monsoons," S&P said in its Economic Outlook for Asia Pacific Q4 2023 report.
Indian economy grew 7.2 per cent in 2022-23 fiscal year which ended March 2023. While retaining its growth forecast for the current fiscal at six per cent, S&P also maintained that India's economy will grow 6.9 per cent in both 2024-25 and 2025-26 fiscal years. S&P said India's consumption growth as well as capital expenditure remained 'strong' in the June quarter. With regard to growth in the Asia Pacific region, S&P said it remains a "multi-speed region" and slightly raised its forecast for 2023 to 3.9 per cent amid domestic resilience.
"In all, growth in the region has generally remained resilient. Year-on-year GDP growth picked up in the second quarter in both developed and emerging Asian economies. India led again, with GDP growing 4.2 per cent quarter on quarter to a level 7.8 per cent up on a year ago," S&P said.
