New Delhi: Fitch Ratings, one of the biggest rating agencies, has raised the growth outlook for India in 2023-24 to 6.3%. The rating agency raised its estimate from 6% in March. This makes India one of the fastest growing major economies in the world.
In a report released on Thursday, Fitch Ratings said, “Recent high-frequency data point to sustained near-term momentum as highlighted by rising PMI indices, higher car sales, and increased power consumption.”
Fitch Ratings report mentioned that the Indian economy continues to benefit from high bank credit growth and infrastructure spending.
It said that the slow inflation will help consumers over time and households have now turned more optimistic about future earnings and employment.
The National Statistical Office (NSO) gave a GDP estimate of 7.2% which was also higher than 7% it had predicted earlier. The Central Government’s estimates the GDP growth for 2023-24 at 6.5%.
Fitch Ratings say that while the inflation has eased in India, there are risks in the second half of 2023 given the monsoon outlook and potential impact of El Nino.
The Wholesale Price Inflation (WPI) fell to its lowest in more than seven years to an annual rate of minus 3.5% in May.
Though, many world economies are concerned with rising inflation, India has been able to steer its inflation trajectory quite well.