The S&P global ratings has increased India’s FY2025 GDP forecast by 40 basis points to 6.8%, but also stressed that lower fiscal deficit would dampen economic growth. S&P Ratings said that it expects the growth in FY25 to moderate from the better than expected 7.6 per cent growth in FY2024.
In a recent press statement, the rating agency highlighted concerns regarding restrictive interest rates potentially dampening demand in the upcoming fiscal year, alongside regulatory efforts aimed at curbing unsecured lending, which may impact credit growth.
S&P, in its ‘Economic Outlook for the Asia Pacific’ report, expressed optimism about robust growth across Asian emerging market (EM) economies, with India, Indonesia, the Philippines, and Vietnam leading the pack.
The agency also anticipates a further decline in consumer inflation, expecting it to average at 4.5% in fiscal year 2025.
For FY26 and FY27, S&P Global ratings has kept its growth projections unchanged at 7%. It underscores potential upward risks surrounding inflation. Furthermore, the report suggests that India may witness rate cuts of up to 75 basis points in the calendar year 2024, indicating potential monetary policy adjustments to address economic challenges.
