Fitch cuts FY23 GDP growth forecast to 7%
Attributes reasons to slowing global economy, elevated inflation and rising interest cost; Its previous forecast was 7.8% for FY23; Global rating agency also slashed GDP growth rate outlook for FY24 to 6.7% from 7.4%
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Supply Shocks, Inflation Worries
- GDP expanded 13.5% in June qtr
- Posted 4.10% growth in March qtr
- RBI expects the economy to grow 7.2% in FY23
- Apex bank already hiked interest rate by 140bps to 5.4% in 2022 so far
- It may hike repo rate to 5.9% by Dec
- Fitch slashes world GDP growth forecast by 0.5% to 2.4% for 2022
New Delhi: Fitch Ratings on Thursday slashed India's GDP growth projection for FY23 to seven per cent, saying the economy is expected to slow against the backdrop of global economy, elevated inflation and high interest rate. In June, it had forecast 7.8 per cent growth for India. "We expect the economy to slow given the global economic backdrop, elevated inflation and tighter monetary policy.
We now expect the economy to grow seven per cent in the financial year to end-March 2023 (FY23) from 7.8 per cent previously, with FY24 also slowing to 6.7 per cent from 7.4 per cent before," Fitch said in its September edition of the Global Economic Outlook. As per official GDP estimates, the Indian economy expanded 13.5 per cent in June quarter, higher than 4.10 per cent growth clocked in January-March. The RBI expects the economy to grow 7.2 per cent in current fiscal year.
The rating agency said inflation moderated in August as crude oil prices eased, but the risk to food inflation persists given negative seasonality towards the end of this year. The wholesale-price based inflation softened to 11-month low of 12.41 per cent in August, even though retail inflation inched up to 7 per cent.
