Fitch Raises India's Growth Forecast to 7.2%, Consumer Confidence Spurs Economy

Fitch Ratings has increased India's growth forecast to 7.2% for the current fiscal year, citing elevated consumer confidence and rising investments. The report expects inflation to fall to 4.5% by the end of this year with a 25 basis points rate cut from RBI. Growth rates for subsequent fiscal years are projected at 6.5% and 6.2%, respectively.

In a bullish turn, Fitch Ratings has revised India's growth forecast for the current fiscal to 7.2% up from the previously projected 7% in March. Elevated consumer confidence and increasing investments are cited as key drivers for this upward revision.

Fitch's June update on the global economic outlook expects inflation to taper down to 4.5% by year-end. Concurrently, the Reserve Bank of India (RBI) is anticipated to cut policy interest rates by 25 basis points to 6.25%.

Looking ahead, the ratings agency predicts India's economy to maintain robust expansion rates of 6.5% and 6.2% in the fiscal years 2025-26 and 2026-27, respectively. The RBI's forecast aligns closely with Fitch, while other institutions like ADB, S&P Global, and Morgan Stanley have slightly varied estimates.

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