India's FY23 GDP growth at 7.3% and inflation above 6%: S&P Global Ratings projection


Published On: Monday, September 26, 2022 | By:

India's FY23 GDP growth at 7.3% and  inflation above 6%: S&P Global Ratings projection

S&P Global Ratings projected India's economic growth at 7.3% in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold. S&P Global Ratings today( 26 September 2022) projected India's economic growth at 7.3 percent in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022. In its Economic Outlook for the Asia Pacific, S&P said India's growth next year will get support from domestic demand recovery after the coronavirus pandemic. "We have retained our India growth outlook at 7.3 percent for the fiscal year 2022-2023 and 6.5 percent for the next fiscal year, although we see the risks tilted to the downside," it said.

Other agencies have cut India's GDP growth forecast amid higher inflation and rising policy interest rates. Earlier this month, Fitch Ratings slashed the growth estimate to 7 per cent for the current fiscal from 7.8 per cent pegged earlier. India Ratings & Research too had reduced its projections to 6.9 per cent from 7 per cent earlier.

Asian Development Bank has cut the projection to 7 per cent from 7.5 per cent earlier.

The Reserve Bank of India (RBI) expects the Indian economy to grow 7.2 per cent in the current fiscal (April-March). The growth last year (2021-22) was 8.7 per cent. Indian economy expanded 13.5 per cent in the April-June quarter, sequentially higher than 4.10 per cent growth clocked in the January-March period.

According to S&P Global Ratings, elevated core inflation would drive up policy rates further in India, and projected policy interest rates to be 5.90 per cent by the end of this fiscal. To tame stubbornly high inflation, the central bank has already hiked benchmark interest rates by 1.40 percentage points to 5.40 per cent. In its monetary policy review on September 30, RBI is expected to hike rates by another 50 basis points to a three-year high level of 5.90 per cent.

We are on Telegram!

Telegram Logo

JOIN our telegram channel to receive updates on Financial News and Stock and FNO Tips.

Click Here!

Follow Us On: