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Fitch cuts India's GDP forecast for FY22 to 8.4%; likely to peak in FY23 to 10.3%

12:35 PM Dec 08, 2021 | FPJ Web Desk

Fitch Ratings on Wednesday cut India's economic growth forecast to 8.4 per cent for the current fiscal year ending March 31, 2022, but raised GDP growth projection for the next financial year to 10.3 per cent.

Fitch had in October forecast a GDP growth of 8.7 per cent in 2021-22 (April 2021 to March 2022) fiscal and 10 per cent in FY23.

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''We have cut our FY22 (financial year ending March 2022) GDP growth forecast, to 8.4 per cent (-0.3 pp). GDP growth momentum should peak in FY23, at 10.3 per cent (+0.2 pp), boosted by a consumer-led recovery and the easing of supply disruptions,'' Fitch said in its Global Economic Outlook.

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During the Monetary Policy Committee (MPC) on Wednesday, the Reserve Bank of India (RBI) maintained India's GDP growth projection for the current financial year to 9.5 per cent on accelerated economic recovery along with pent-up demand.

Accordingly, GDP is expected to grow at 6.6 per cent in Q3, 6 per cent in Q4, 17.2 per cent in Q1FY23 and at 7.8 per cent for Q2FY23.

In a virtual address after the MPC's bi-monthly meet, RBI Governor Shaktikanta Das said: "Incoming information indicates that consumption demand has been improving, with pent-up demand getting reinforced by the festive season. Rural demand is exhibiting resilience and farm employment is picking up with the robust performance of agriculture and allied activities, supported by a strong start to rabi sowing."

"Other indicators like railway freight traffic, port cargo, GST receipts, toll collections, petroleum consumption and air passenger traffic have also picked up in October or November."

(With inputs from agencies)

Also Read: RBI's Monetary Policy Committee keeps Repo Rate unchanged at 4%

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