India's GDP Growth Forecast Retained Amid High Interest Rates: S&P Global Ratings

S&P Global Ratings has retained India's GDP growth forecast for the current fiscal year at 6.8%, citing high interest rates and decreased fiscal stimulus as factors tempering demand. While the Indian economy showed an 8.2% growth in FY 2023-24, future growth estimates vary among different financial institutions.

S&P Global Ratings on Monday affirmed India's GDP growth forecast for the current financial year at 6.8%, highlighting high interest rates and reduced fiscal stimulus as key factors modulating demand.

In its economic outlook for the Asia Pacific region, S&P noted India's impressive 8.2% growth in FY 2023-24. However, growth is expected to settle at 6.8% this fiscal year as non-agricultural sectors face challenges.

Looking ahead, S&P projects growth rates of 6.9% and 7% for FY 2025-26 and 2026-27, respectively. These estimates differ slightly from the Reserve Bank of India's projection of 7.2% for the current fiscal, buoyed by improving rural demand and easing inflation.

Other agencies, including Fitch, ADB, Moody's, and Morgan Stanley, offer varied growth forecasts for India's economy, ranging from 6.6% to 7.2% for the upcoming years. In contrast, S&P upgraded China's 2024 GDP growth forecast to 4.8%, reflecting a mixed outlook of subdued consumption and strong manufacturing investment.

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